Do not use value range pricing if you want to sell your home!
Why do I say this? Because after the frustrations of dealing with this particular marketing initiative my buyers are telling me "don't even SHOW me a home that says Value Range Priced at...!"
Why are buyers so frustrated? Let me illustrate:
Home A is in MLS at $350,000 list price. In the comments it says "seller will entertain offers between $350,000 and $400,000."
First of all, we are not in the entertainment business. My buyers are serious, qualified, and want to negotiate a sensible deal.
My buyer submits an offer at $335,000. Seller counters at... $400,000?! My buyer is totally confused. I imagine the seller is likewise totally frustrated and confused.
I call the agent and get the following explanation: It says in the comments that the house is value range priced and the seller wants closer to the high end of the value range.
My question to the agent: will they accept $350,000? The agent answers: not at this time.
Which begs the question: Why are they out there at ALL at that price?
The agent tells me it is an effort to "tempt" my buyer to look at a higher priced listing than what they ideally want to spend to demonstrate the incredible value they will get if they just spend more.
My buyer has a price target for good reason: that's what they can afford.
I am not blind. I understand what the agent is doing with this strategy: they are trying to get offers which may convince a seller who wants to overprice his home that the market value is really lower. What I want to know is why are you wasting my buyer's time?
I have observed that most of these "value" priced homes have been at that "value" for quite a long time. If the low end of your value range was just an incredible bargain, don't you think a buyer would have been pounding at the door to pay it?
I had an offer a week ago on another one of these homes. Apparently this seller was totally frustrated with it. Once he heard that we were coming in with an offer, he instructed his agent to drop the value-range comments and RAISE the MLS price from $300,000 to $325,000. We wrote our offer based on the $300,000 MLS price and the next day it was $25,000 higher in MLS. All this after the house had been in MLS with the $300,000 price tag for 90+ days.
The good news, my buyers have found their homes and are successfully on their way to closings, but these value-range homes are still on the market.
In my opinion you price your house fairly, negotiate with a qualified buyer to a fair market value, and you close. Call me old-fashioned!
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