Range Pricing

[Jonny]

Wow, I have started a conversation somewhere else and was blown away by the response. I am curious what you guys think about range pricing?

I have never done it, but I have heard of some great results.

The home is worth 320, but most of the buyers are at 300. The home is listed at 300 and in the additional comments it is stated that the Sellers will entertain offers from 300-340. They of course turn down anything under 320. This gets the home in front of more buyers and it will be the best home priced at 300 if it is really worth 320. So if the buyers really want it they will have to find a way to come up with more.

I heard of this idea from Broker Bryant. What do you think?

[papaul1621]

In my opinion, having a price range isn't a good idea in this market. For instance in your example, these days most buyers will still like to offer below 300 because they know it's a buyers market and they don't want to give what the seller is asking for, which is 300-340. And even though the seller will reject the offer, I'm sure with today's inventory, the buyers will find some other seller that will take that kind of offer. Plus, with you knowing that the sell will reject anything under 320, well if the house been on the market for a while, the seller might take anything at all.

[papaul1621]

I forgot to mention when its a sellers market, having a price range is perfect. You will definitely get multiple offers and then counter them all. I remember when I first got into real estate in 2003, I had a buyer that wanted to buy a condo. I found out there was 10 offers so we offer $20k over the asking price and still got a multiple counteroffer and didn't even get the condo.

[metaylor9]

It does play into home searches well and get your home in front of more people, but I think in the end it really hurts more than it helps. People see right through this and often don't want to work with someone engaging in these "questionable" tactics. There are too many homes on the market for buyers to mess around with a situation like this.
I think it should be against the local MLS rules to do this.

[rvolk75]

I agree that the price ranging would work in the sellers market only. Today, buyers have so much to choose from, why would they offer you more than what you're asking for. They'll go across the street and purchase another property.

[gregharaksin]

I hate explaining range pricing. That being said, 12 out of 19 active listings at our office have a price range. The main listing agent just says ' I'll let the market decide the price'.
Getting people to look at the home and write an offer isn't a bad thing, even if the offers are low. Most offers are low right now anyway.

[Jonny]

I hate explaining range pricing. That being said, 12 out of 19 active listings at our office have a price range. The main listing agent just says ' I'll let the market decide the price'.
Getting people to look at the home and write an offer isn't a bad thing, even if the offers are low. Most offers are low right now anyway.

I know you said that you hate it, but could you explain it a little more? It seems to me that it would definitly increase the traffic and work load of the agent and seller. If they are constently having to turn down offers that are too low, and go through the rigamoroll of responding and such. Not that it would be too much work just more. I mean I am down to do what ever it takes to help get a home sold.

[gregharaksin]

your situation is perfect for range pricing. I think when buyers are looking for homes, they'll put a top range of 300, 350, 400. I mean, a buyer is not going to say I want to see all homes under $327.

So, you're home will be seen (at least on the MLS) by all those people that say they don't want to pay over $300. And hopefully they will be willing to pay more if they really like the home. sometimes it will generate multiple offers.

Again, it's just a way to start dialogue, and hopefully negotiations. Our MLS allows a range in the listing price.

you're going to get low offers anyway. Don't get offended and counter them.

my two cents.

[OCTeam]

Range pricing can be entered as an option in our MLS. The ideal range will have a top value above what would have been the fixed value. The lower price is set to assure it remains competitively priced in the market.

It is a marketing concept to expose the house to more buyers. Say you value range the home at $500,000-$550,000. When searching the MLS up to $500,000, then the home shows up with the range with the comment "Seller will entertain offers between $500,000 to $550,000". It allows a home buyer to see homes they may never have considered based on a fixed price. With a fixed price, the higher the price, less buyer activity. To be effective, a price range with a 10% spread seems works best.

Some thoughts about it:

• It attracts buyers who may not have considered a higher priced home.
• It speeds up the buying process as it eliminates over pricing or underpricing a home vs. a fixed price.
• It attracts buyers who may not have considered a higher priced home.
• It speeds up the buying process as it may encourage an offer that a buyer may not have made at a higher fixed price.

Of course, someone can offer anything they want, even outside the range. We always tell a seller to expect an offer at the low price. Then, because they have hired us, we then negotiate the price to market value. Many times it the buyer's agent that does not understand the concept and stands it the way of it working as it may create more work for them trying to explain something they don't understand when making the offer.

Some like it, some don't. It can be debated to death. We use it many times when we know the seller wants to list too high (don't they all!), so we offer the range pricing as an alternative to just letting the house sit with no showings. Once they receive an offer in writing, the thinking about price many times changes very quickly. Theoretically, it allows the buyer and seller to determine the market price vs. setting a fixed price.

[StGeorgeUTproperty]

I am not a fan of 'range pricing'. I think it is pointless really. I mean if I saw a 'range' of a seller looking at offers from 300-340 etc... why on earth would I ever consider offering...say $330. Clearly they will go down to $300, I would offer that or less. Seems like a game, where the seller does not have the upper hand. I realize in a sellers market-maybe this would work better, but as an agent, it would not be my priority to show the home. Just my thoughts. Good topic of discussion.