Back before the days of the Internet and property portals, you had to either look in an estate agents window or flick through the property section of the local newspaper if you wanted to get an idea of what was on the market or a feel for what your own property might be worth.
Then in 2000 the four largest estate agents formed a little company called rightmove.co.uk Ltd and in 2006 Rightmove PLC was listed on the London Stock Exchange and the rest, as they say, is history. So how has Rightmove and the other portals changed the way we consider asking prices?
Well, it is all about £9.99 not being a tenner and this form of pricing pre-Internet days.
When the main advertising medium was shop windows and printed press, the adverts were full of properties that were, for example, £99,950, £249,950 or £499,950, or, barring £50, £100,000, £250,000 and £500,000. And this matters. Just Google, “...psychology of pricing…” and you will discover a wealth of information on why pricing something 1p, 5p and indeed £50 under gives the impression of a much lower price.
We fall for this every day. Just take a wander around your local supermarket or any major online store and you will see this approach being used time and time again. And it works because of how we search for these items. Search being the operative word.
When we shop for everyday items, we search by the item first and then make the purchasing decision based on price. However, for property, we choose by price first and then filter by our requirements. And when we choose by price, we do not say to the agent, “....what have you got between £299, 950 and £349,950…”! We choose based on round/whole numbers, we would ask, “...what have you got between £300,000 and £350,000…”
This is exactly how Rightmove and the others allow you to search for property:
And it is because of this “round number” searching, that when it comes to the online world, you have to give greater consideration to how you price to appeal to as many applicants as possible.
Take the example of a property that is being marketed for £499,950. Chances are, for this property to appear in people’s searches, they would be filtering on property with an upper limit of £500,000 and a lower perimeter of £475,000, £450,000 or £400,000. However, what happens if you increase the price by £50 to £500,000?
The applicants searching up to £500,000 still get the property in their search results so no change there but someone looking up to £550,000 or £600,000 is likely to set a lower threshold of £500,000. All of a sudden, you are appealing to a whole new audience and your £500,000 property is not the top of the search (and therefore the most expensive one) but nearer the bottom and by default, the less expensive option!
The good news is that at Waymark we understand the importance of marketing property to match how technology has forced applicants to change the way they search for property. For a free no obligation marketing appraisal, please call, email or complete our short valuation request form.