How Do Real Estate Agents Price Houses?

How do real estate agents price houses? Even after working in the real-estate industry for many years, I have to admit it’s strange how real estate agents gravitate towards certain pricing structures: $649,000, $499,000, etc. Why don’t we see prices like $654,943 or $1,493,597? Doesn’t every dollar count?

This got me to notice how often properties priced under $1,000,000 have a 9 as their final nonzero number, like $699,000 and $729,000, while properties priced over a million often have a 5 as their last nonzero number, like $1,175,000 and $2,350,000.

This got me to thinking about why this would be. Perhaps realtors listing property under $1 million want to intimate there’s a deal to be made or they want to squeeze below a price point (for instance $699,000 as opposed to $700,000) so when buyers are searching below that point, the listing won’t be missed. On the other hand perhaps they feel there’s a good chance the property will sell for more than the asking price and are really looking to stir up interest, as we are definitely these days.

Realtors listing property over $1,000,000 may choose list prices like $1,450,000 because they want to position the property as being priced where it should be. Perhaps the idea is that the property is a luxury and therefore won’t be haggled over.

How do real-estate agents price houses? Any thoughts?