When pricing commodities, sellers often reduce the cost of the product by £1 or £5 to appeal to buyers. An item that costs at £1000 would be priced at £999 or £995 to give the illusion that the item is cheaper than it actually is. This strategy actually works because of a phenomenon known as the psychological price point. In a competitive environment, buyers would choose the items that have been priced £995 or £999 over those that have been rated £1000 even when the cost difference is just marginal. This has resulted in many sellers opting for 5s and 9s when pricing their products but is this strategy effective in the property market?
The problem with such “psychological price points” is that they are not recognized by Rightmove and other online property portals. When searching for properties to buy on Rightmove, the most commonly used search criteria are the postcode/area and the minimum and maximum price range. Users get to choose the price range from a dropdown menu and this is where the power of the zero price strategy manifests itself.
The Zero Price Strategy is a marketing tactic where you set the price of your property to fit within specific pricing brackets on Rightmove. This strategy helps your property appear in more searches and this increases the chances of making a sale.
To understand this strategy in detail, let’s say that your home is worth £500,000 but you choose to price it at £499,995 so as to make the price appealing to buyers. On Rightmove, however, a buyer looking to buy a house worth £500,000 may set a search criteria of £500,000 to £550,000. On performing the search, however, your property will not appear on the search results since it doesn’t fall in this price bracket.
Your property which you have priced at £499,995 will only appear when a potential buyer inputs a search criteria of £475,000 to £500,000. The property is, therefore, only visible to a limited number of potential buyers and this reduced exposure could mean that it takes longer to sale.
Had you priced your house in a round figure such as £500,000, the property would appear in all of these searches and this greatly increases your chances of selling it. The price ranges £475,000 – £500,000 and £500,000 – £550,000 on Rightmove are meant to advertise properties worth £500,000 but when you price your home at £499,995 or £499,999 it misses out on the potential buyers who are searching in the second price range band.
Does it make a difference?
Yes, it does. There is a link between the amount of views a property gets on Rightmove and the time it takes to sell it. Properties with a lot of views sell faster and you can expose your home to a lot of buyers by adopting the zero price strategy. Talk to us today and let us discuss how to price your home properly so as to ensure that make sure that it is exposed to a lot of buyers.