Question:
“We’re thinking of pricing our home at value range $794,325 to $823,450. Do you think that’s a good range?”
Answer:
Sorry, but I don’t. I want you to do something. Tell that price to a friend of yours, then ask them to repeat it back to you.
Odds are, they can’t. Why?
Our brains have a finite amount of cognitive resources. You could say we have limited bandwidth. Most psychologists say we humans can only remember 7, plus or minus 2 “chunks” of information.
That’s why remembering a phone number is tough for most people. It’s 10 numbers, or “chunks.” Now, for some people, common area codes become one “chunk” and if the number has some pattern to it (like 858-555-2200), it’s easier.
Back to prices…
When our senses are overloaded, we can get confused. You don’t want your buyer to be confused, do you?
For me, the rule when doing “value range pricing” is KISS. Keep It Simple, Sally. So I recommend you do $795,000 to $825,000. (By the way, I’ve found that ranges of 7-10% are optimal, but I won’t go off on a tangent here and explain why.)
