If you’re trying to sell your house in a hurry, your first instinct might be to cut the price in hopes of attracting more buyers. But this could be a mistake. It sounds counterintuitive, but particularly in a competitive market, you may actually be able to sell your house faster by pricing it slightly higher than other houses in the area.
A study published in 2013 found that homes listed for 10 to 20 percent more than similar properties sold for slightly more.
As marketers well know, consumers see the price of things as more than just a number; they view it as a direct reflection of the value of it.
When you walk into a department store and see a pair of pants for $79 and another for $19, you assume the $79 pair has to be “better”. You have no idea how much the pants actually cost to make, so you rely on their retail price as an indication of their value.
This perceived-value system also applies to home sales. When buyers come across two similar houses — same number of bedrooms, same location, same square footage — with different prices, they suspect that either the more expensive home is overpriced or it has some features that make it more valuable than the other listings.
While pricing your house slightly above the competition can help you move it faster (and for more money), you must be careful to make sure your increased asking price remains fair.
If the higher price reflects the home’s improvements and benefits, and if the price isn’t significantly above asking prices of your competition, you may find that listing higher will intrigue buyers looking for “the best of the best” within their budget.
The higher asking price encourages buyers to seek out reasons why it’s worth more, forcing them to focus on its selling points. This is known as “confirmation bias,” in which individuals begin with a presupposition, example: “this house is worth more,” and then search for the reasons that confirms their belief.