Pricing a Home for Sale in Northern Michigan: Beware of the Anchoring Bias

20 Oct 2025 · 3 min

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2:59

In this video, real‑estate specialist Sander Scott warns sellers that a headline‑grabbing "sold over asking" result does not guarantee they received the maximum possible price. He explains the psychological anchoring bias—how the first number a buyer sees (the listing price) becomes a mental reference point that shapes all subsequent offers. While many agents push for a low initial price to spark a bidding war, Scott argues that a low anchor caps buyer expectations, typically limiting bids to 5% above asking and rarely reaching 15‑20% higher. He illustrates the point with a case study of a one‑of‑a‑kind horse property: other agents suggested a $1.5 M price, but Scott listed it at $2.2 M and sold for $1.76 M, netting over $250 k more than a low‑anchor approach would have. He likens this to luxury retailer Nordstrom, which sets high list prices and then marks them down, making customers feel they received a deal. The key takeaway is that setting a higher asking price creates a stronger anchor, protecting seller equity and better reflecting true value, rather than merely generating a bidding war. Scott concludes with a call‑to‑action, inviting viewers to schedule a pricing strategy consultation via his Calendly link.

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Have you ever heard a seller brag, "We sold it for over asking!" all excited? Well, here's the insider's truth: getting over asking doesn't always mean that you got the most money for your home. In fact, if you set the wrong starting price, you might be leaving tens or even hundreds of thousands of dollars on the table. There's a powerful force in psychology called the anchoring bias. It means that people's decisions are heavily influenced by the first number they see. And in real estate, The first number they see is your asking price, and it becomes the mental anchor for every potential buyer who looks at your property. Many agents will advocate to price low in hopes of creating a bidding war. The problem? If you anchor low, buyers may bid 5% over asking, and that might feel like a win, but rarely are they going to go 15 to 20% higher than the anchor that you set. No matter how unique or desirable your property is. You set the anchor the moment you set your listing price. Instead, starting higher sets a stronger anchor. Let me give you a real example. I sold a one-of-a-kind horse property. At least 3 other agents said it should be priced around $1.5 million. Well, we started at $2.2 million. They had it for sale by owner and they had it listed at $2.2. We started at $2.2 and eventually sold it for $1.6. $1.76 million. Yes, it looked like a big price reduction on paper, but compare that to the alternative. Had we anchored at $1.5 million, the seller would have missed out on more than a quarter of a million dollars. We see this strategy work a lot in luxury retail. Think of Nordstrom. They price high, and when they mark something down, customers feel like they are getting a deal. Even if they spend more than they would at a discount store. That's the anchoring bias at work. The original number sets the frame for what feels like value. So here's the big takeaway. Don't be fooled by the over-asking headlines. The real win is making sure your asking price sets the right anchor, one that maximizes the true value of your property not just sparking a bidding war. Simply sparking a bidding war does not mean that you are maximizing the value in your property. If you're considering selling and want a pricing strategy that protects your equity and positions your home the smart way and takes your personal circumstances into account, let's chat. You can book a time with me directly on my Calendly link in the description. I'd love to show you how to get this right.