In commercial real estate, it is all about the numbers. In residential real estate, it is not only about the numbers, but also about emotion and psychology. Focusing on the psychology aspect, why do properties get listed $1 below the next price level, i.e. $1,999,999 instead of $2,000,000? Because, there is a huge psychological difference between those numbers. To state the obvious, $2M is $2,000,000, $1,999,999 is not $2M. Besides that, physically they look far different-one has a “1” in front and the other has a “2” in front. So, we real estate brokers typically price properties just below the next price level. I’ve only had one Seller in my career resist pricing their property a dollar below the next level of millions; their property is still for sale…
To put it in perspective, what’s the gas price in your town? On Nantucket, the price is $4.99/gallon. Well, ever notice the third number behind the decimal point? I have and I’ve never seen it be a “3”! The price is actually $4.999/gallon-that’s $5/gallon, right? No, it’s $4.99/gallon;-)