Why Does Pricing on The Bridge Net Sellers More Money? (Video)

Why Does Pricing on The Bridge Net Sellers More Money? (Video Transcription)

Hi everyone, my name is George Belleville. I’m a realtor with the Head for Home team. And I’m creating this video because I wanted to talk to you about a pricing strategy. We call it pricing on the bridge. What that means is we generally like to list a property on a twenty-five thousand dollar increment. And the reason we do that is because of the way people search for houses. Our role as someone who’s selling your house is to get the most number of people to see your house and then be interested in it. And pricing on the bridge is one of the ways we do that. And I’ll give you an example of how this works and use some numbers to make it make sense.

So let’s just say you have a house and you think it’s around $600,000 would be a price point for it. So there are a couple of different things you can do, and you see a lot of houses that are listed for sale for let’s say $599,999, right? So it’s it doesn’t start with a six, it starts with the five people think that that helps. So what that does and if you think about how you’re probably if you’re selling a house you’re usually looking at houses and you go into a lot of the portals and the different search portals that we have now realtor.com and Zillow and all that. And they either have, you type in the price, there’s a drop-down menu or some other method of selecting the price range that you want to look at. So if it’s a drop-down menu, then you might search from say 400 to 500, 500 to 600, or whatever the case may be. So in this case, if you think 600,000 is the right price and you price it at 599, you’re gonna get people that are looking from 5 to 6 or 550 to 6. So you’re going to get all of those people. Nobody looks in those and puts in, let’s look up to 605 or 607 or 608. They do it in increments, in usually $25,000 to $50,000 increments. So at 599.9, you’re going to miss the people who are looking from $600,000 to $650,000. And that could be a lot of people. And the statistics show, I think it’s 20%... you get 20% more showings when you price on the bridge.

So if you priced your house at $599, all those people looking from $6 to $650 would not see your house by $100. And in fact, your house might check all of their boxes and might actually look like a great value to them at 600, right? Like they might think, hey, you know, we’re looking from 6 to 650, but this house checks all the boxes and has everything we want and it’s only 600,000. At 599.9, those people aren’t going to see that house. And conversely, the same thing, if you say let’s do 605, you’re eliminating all the people looking from 550 to 600 to 600 just for a few thousand dollars. And the reality is, if you’re looking at a house and you see a house that’s listed for 599 or 597 or 595, you’re probably pre-approved to 600,000 anyway. You’re going to go see that house if it looks good and it’s the right area and it’s marketed right and has good pictures. Nobody’s going to not go see a house for a few thousand dollars.

So that idea of pricing it a little bit low like that, you’re really just eliminating other people from seeing it. And the same thing on the other side. If you think pricing it at $605 is going to get you $5,000 more, it’s really not because you’re eliminating the competition from all the people below $600,000. And I think people miss that and they price a house as if it’s like a shirt that’s on sale and you want to price it at $19.99 instead of $20. That’s not really how it works. When people talk to a loan officer, they don’t usually get pre-approved up to $5.93 or something like that. It’s usually an even number. That’s what they’re looking for. And that’s why we price the house that way, because we want to get the most number of people seeing your house so that we have the most competition to get an offer. So hopefully that all makes sense. And if you have any questions, please give us a call, text, or email, and we’ll talk to you soon. Have a great day.