This is a follow-up to my post, There is No Such Thing as an Under-Priced House. While reading through various posts on the topic of under pricing, on comment really caught my eye. Basically, the commenter said something to effect that if the goal of under pricing was to simply get the highest bid, then every property should be priced at a dollar. Here's why I think that's a GREAT IDEA!
As a listing agent
There would no longer be any reason to have to 'prove' your pricing range based off your market analysis. The market (as it always does anyway) will determine that value by the prices that come in on the offers. Yes, you'd still have to do a CMA (sorry) because it would still be nice to know where the actual sales price should be, but now, with one dollar pricing, condition and show-ability (staging anyone?) take a front seat to pricing. Now you'll know that your property needs work (if it does) and the pricing will reflect that, and you'll know in days, not months or years.
Marketing becomes primary to the listing agent. Not the BS about listing on MLS/websites, etc but true marketing, as in "how you can market the home to the most people in the shortest amount of time and get the most people in the home making offers" type marketing. You truly do have to be better than the next agent, and if you are, you now have the real ability to charge differently than the next agent, as well.
As a buyer's agent
Gone will be the lackluster buyer's agent. No more glorified chauffeur service. Buyer's agency will now have true value for the masses! The buyer's agents can no longer simply say, "well, it's priced at X, what to you want to offer?" Nope, now, as a buyer's agent, your client is looking to you to do a market analysis on the home and help guide them in making an offer that will both get them a deal AND get them the home! It's all on you buddy, but it's all good, too. See, with one dollar pricing, it's the buyer's agent that is now the most important agent in the transaction. Upfront fees will be standard practice, and if you're a successful buyer's agent, one that gets their clients into properties, then, like the listing agent, you can realistically charge...and get...more for your services than the so-so agent.
Will this actually happen? Probably not in my life-time. But for those agents that always argue for a "Higher Standard" for real estate agents, it's not in increased education, higher fees and other methods that have been mentioned. It's one dollar pricing on all listings. That's where the cream of the crop will rise and the others will settle at the bottom.
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