Sunday, 9 May 2010

Zap The Zero

I was reading an interesting piece in Smart Money by Jack Hough about how home sellers should avoid putting zeroes in their sales price. It's not even a question of reducing the price from £400,000 to £399,999. What works just as well is raising the price to, say, £401,298. People tend to subconsciously interpret precise numbers as being smaller than round ones.

"Well-researched by cognitive scientists, this effect has also been documented in the real world. One recent analysis of thousands of real estate transactions in South Florida and Long Island, New York, found that houses originally listed without zeroes did indeed fetch higher final prices than those for which bidding started at a round number."
I'm not sure this research has much relevance to the exchanges, but when time permits, I do tend to offer lays at 1.4, 1.5 etc. on the assumption that this is more appealing to a backer than 1.39 and 1.49, but perhaps I would be better served by offering 1.38 or 1.48.

No comments: