Online Real Estate Marketing
These days, clients are buying homes on the basis of online listings and drone video tours. Digital marketing services and technology enable agencies and clients to assume near-constant availability and robust communications. And clients have come to expect this from Real Estate agents and brokers.
Real Estate Marketing – Online vs Traditional
A more subtle distinction between traditional marketing and online marketing of real estate occurs in the area of pricing. Real estate pricing begins by reviewing sales and current listings of comparable properties. Then the seller and agent typically agree to set the price just below the nearest ‘round number’. This Psychological Pricing tactic exploits the assumption that a buyer will have less ‘sticker shock’ with a price of $499,950 than an even $500,000. Even though the difference comes down to only $50, a tenth of one percent.
For completeness we should mention that some buyers don’t want to pay less than a certain figure. For example, they may have sold a house for that price, and want to avoid paying capital gains tax. But this preference can also arise from the Giffen Goods effect, where a buyer equates price to value or prestige. Even in today’s highly competitive real estate market, a mansion in a million dollar neighborhood listed for $700K could be more difficult to sell than if it were listed at $950K.
Psychological Pricing has the greatest impact near ‘round numbers’ – even tens or hundreds of thousands. Experienced realtors know that buyers who might balk at paying $500,000 (or $5,000,000) for a house have less resistance to $499,900 (or $4,999,500). In traditional real estate marketing, Psychological Pricing works. But this can create a problem in online property pricing.
Online Real Estate Listing Price Ranges
Many real estate agency websites host MLS listings, maps and listing details. These offer prospective clients the ability to search for dwellings and land based on the type of property (house, condo, acreage, lot, etc.), geographic area (or zip code or school district), number of bedrooms, baths and garages – and a price range. The way the price ranges are set up and the exact price of the listing can have a big impact on how many people see the listing when they search.
Traditional price ranges have one round number endpoint. Either the low or the high end of the range. So you might see either (0-99,999), (100,000-199,999), (200,000-299,999), etc. Or alternatively, (1-100,000), (100,001-200,000), (200,001-300,000). In either case, the ranges do not overlap.
Overlapping ranges provide a more flexible system. The overlap can be set to as little as a dollar, i.e. (0-100,000), (100,000-200,00), (200,000-300,000), etc. Or it could be configured to a larger amount, say 10%: (0-100,000), (90,000-110,000), (100,000-200,000), (180,000-220,000), (200,000-300,000), etc. A property priced in the overlap zone will appear in two brackets. As a result, it will show up in the search results about twice as often!
In the example above, a house listed at $205K will appear in searches for (180,000-220,000) and (200,000-300,000). More appearances in the search results mean more opportunities to sell the property. An alternative method of producing this effect is to program the real estate search engine to return properties that are priced between 10% below the low price specified and 10% above the high price specified.
Pricing Strategy for Online Real Estate Listings
Most importantly, you want to price your listings to fall in one of these overlap zones. Most real estate websites offer price ranges with only a one-dollar overlap. So price the property at a level common to two adjacent price brackets.
Example. If the comps on a property come out at $345,000 and the price ranges are (300,000-350,000) and (350,000-400,000), it may be better for the seller if the property is listed at $350,000. Psychological Pricing doesn’t work well for online real estate marketing. $344,995 rarely appears in two price intervals.
Conclusions and Recommendations
Real estate buyers frequently search local MLS listings or other real estate-related online marketing sites to get an idea of what homes are available in a specific neighborhood. Many agency websites include the ability to sort and sift the MLS listings by price range, geographical area or zip code, lot size, # of bedrooms, # of baths, # of garages, and other home amenities. Having this feature on your real estate website can attract buyers – and sellers.
Avoid Psychological Pricing in the Real Estate Market
Set online real estate listing prices at a ’round number’ close to the value suggested by the comps. For the MLS listings search on your real estate website, use pricing intervals that overlap, with each overlap including a round number.
Austin Real Estate Marketing Company – Semantic Advantage Inc.
Specializing in digital marketing for Central Texas businesses, Semantic Advantage offers search engine optimization SEO services and social media marketing services for Austin area corporations and small businesses. We also provide search engine marketing SEM pay-per-click PPC campaign management for search and display advertising. If you would like to improve your current real estate marketing results, contact us today to discuss your goals and solution options.