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Old 05-22-2007, 10:20 AM
 
Location: Stuck on the East Coast, hoping to head West
4,596 posts, read 10,721,644 times
Reputation: 9703

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I'm not in the biz at all, but have noticed a trend of sellers using price ranges instead of listing houses at one price. In other words, instead of listing a house at $150,000, you'd list at something like 125,000-175,000. By the way, this isn't driving prices down. Apparently the advantage is that you get more buyer attention,etc. Anyway, here's a link to a story about it

http://www.hgtv.com/hgtv/ah_real_estate_selling/article/0,,HGTV_3165_1373773,00.html (broken link)

I have to admit, this appeals to me as both a buyer and a seller. Anyone have experience with it?
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Old 05-22-2007, 11:36 AM
 
Location: Coachella Valley, California
15,607 posts, read 38,645,285 times
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Why would you offer anyone the high range if you can offer them the low range? I don't think the 'value pricing' system is a good one because it puts limits on what a seller can get for their home.
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Old 05-22-2007, 12:01 PM
 
377 posts, read 1,642,041 times
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In a seller's market, where there are multiple bids it has more of a chance of working, but in a buyers market where there is usually only 1 bid, the buyer is always going to bid the lowest price because they know there usually is nobody else competing.
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Old 05-22-2007, 12:21 PM
 
Location: Stuck on the East Coast, hoping to head West
4,596 posts, read 10,721,644 times
Reputation: 9703
Interestingly enough, sellers are getting more/selling faster because of two interesting points:

1) sellers don't have one price and only one price that they're willing to take and everyone knows that. By listing a range they get access to more buyers and up their chances of a sell. Also, they don't *have* to take the low end. That's simply the start of negotiations. Because really you can price your house at whatever you want, it's pretty much a guess at best anyway. I don't know *anyone* who has ever paid the exact list price--it has always gone under or over (in rare cases) depending on market conditions.

2) buyers rarely stay under budget, they almost always go over so the more buyers you get into your house (via the sale price range), the greater the chance of selling. Of course, the more buyers, the greater the chance more than one buyer will be interested and that certainly helps the seller, too. Actually, come to think of it, I don't know anyone who has ever stayed at or under the budgeted home price, either. Myself included.

Quite honestly, both as seller and buyer, I've always considered the list price as the midpoint of the range anyway. This just seems to put it all out in the open. Like I said, though, I haven't tried it. Although I think I might when I list my house. Has anyone hear tried it?

TwinkleToes--you bring up an interesting point, though. Do you limit by how high the price will go? I dunno. I have a hunch, though, that you don't. I mean if I list at 200,000 I'm not limiting myself and saying I won't take 250,000 if somebody will give it to me. As for the lower price, from what I've seen having that bottom price *seems* to be reducing your chance of getting the ridiculously low offers and you just use that price as a starting point anyway. But again, I can't get any real numbers on it b/c it seems to be so new.

There's also the issue of MLS which it looks like only allows one number, not a range.
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Old 05-22-2007, 02:32 PM
 
Location: Ocala area in Central FL
627 posts, read 2,718,119 times
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I remember when a large rocky franchise was promoting this same marketing structure nearly 10 years ago. (that was in the Atlanta Market)
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Old 05-22-2007, 04:05 PM
 
Location: Bloomington IN
7,796 posts, read 9,932,742 times
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Ocala--I too remember that same rocky franchise 10 years ago or so. Do they still do it? I was a buyer around that time and found it intimidating and frustrating. I just stopped looking at that companies ads.
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Old 05-22-2007, 04:49 PM
 
Location: Ocala area in Central FL
627 posts, read 2,718,119 times
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Default Hi rrah!

Quote:
Originally Posted by rrah View Post
Ocala--I too remember that same rocky franchise 10 years ago or so. Do they still do it? I was a buyer around that time and found it intimidating and frustrating. I just stopped looking at that companies ads.
Yes, they still offer it. SOME agents do use it as a Marketing Option. I think if utilized correctly, it may be useful in "SOME" markets... but for the most part, IF a home is Priced right (Not at the high end or at the wee bottom of the market) there is NO NEED for it... Because it can be a huge turn off, just like you found it to be.

the "Highlights" of this plan are supposed to be:

For Sellers:
  • Possibly eliminates any potential risk of under/overpricing
  • Possibly eliminates a need for price reductions
  • Potentially may attract more buyers
  • Potentially Invites more offers – sooner
  • Could Dramatically decreases days on market
  • May Optimizes final sales price allowing true market forces to determine maximum price
For Buyers:
  • Expands your potential pool of homes available to view
  • Eliminates fear of insulting seller with low offers low offer
  • Value Range Marketing properties are easily identified in the MLS
  • Negotiation process is more comfortable when working with a knowledgeable VRM Agent
Sorry to be long winded!!!
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Old 05-22-2007, 06:17 PM
 
Location: Stuck on the East Coast, hoping to head West
4,596 posts, read 10,721,644 times
Reputation: 9703
Thanks, MyHomeisinOcala--I appreciated your taking the time to type all that out. I'm still not sure I *really* understand it, but I appreciate all the feedback. I just wish there were an extremely easy, painless, fast way to sell a house. Not asking for much, am I
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Old 05-22-2007, 07:01 PM
 
Location: Ocala area in Central FL
627 posts, read 2,718,119 times
Reputation: 337
hahaha

Not sure where your home/property is located or the market condition, but I know that some people have had success with 5day.com

I wish you all the best!

Quote:
Originally Posted by bande1102 View Post
Thanks, MyHomeisinOcala--I appreciated your taking the time to type all that out. I'm still not sure I *really* understand it, but I appreciate all the feedback. I just wish there were an extremely easy, painless, fast way to sell a house. Not asking for much, am I
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Old 05-22-2007, 08:22 PM
 
377 posts, read 1,642,041 times
Reputation: 214
Most of the United States is in a buyers market - if you're living in a buyers market, range pricing won't get you anything except possibly confusing a potential buyer that's never seen it before. Buyers are smart - they know that most homes have been sitting on the market for months without any offers. If you list your home in a range, for ex: $125,000 - $175,000, the buyer is ONLY going to look at the $125,000 price and try to negotiate down from there. They're not going to say...hmmm this home has been sitting on the market for 6 months without an offer.. maybe I'll offer $150,000.
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