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Home home in the "range"

Have a listing you can’t sell? Make that property “home home in the range”.

As a user of "Range Pricing" let me see if I can explain how it works and how it lowers my days on market and usually results in a higher selling price for my Sellers.

"Range Pricing" is a marketing technique used to generate more showings on a property. As you know if they don't see it they can't buy it. The goal is to get the property to show up on MLS searches more often. This way Realtors can see the photos and property details and make a decision on whether or not to add it to their showing lists. You do have to disclose in the first line of remarks that the property is Range Priced.

Example: Lets say that the true Market Value of a home is $257,000 to $259,000. Usually the listing Realtor will list this in the low 260's in order to negotiate a selling price in the high 250's. Now let's say a Buyer walks in to another Realtors office and is looking for a home with the same parameters as the one listed but tells the Realtor he does not want to pay more than mid 250's and lets say the Realtor searches for homes with maximum list price of $260,000. Your listing will not show up!!!!! In reality if the Buyer sets a goal of $255,000 and the Seller's target is $259,000 there is probably a deal in there somewhere. But because of the way it was priced the Buyer never had the opportunity to see this property!!

Now "Range Pricing" using the same example would work like this. If the Seller and I agree that $257,000 to $259,000 would be an acceptable offer for his property I would "Range Price" this property from $249,000 to $269,000 with $269,000 being a full price offer(remember this must be disclosed on the first line of the remarks section). Now I am able to enter this listing with a list price of $249,000. Assuming the property is priced at market value whenever a Realtor searches the MLS for similar properties my listing will be the first one on the list!! Talk about market positioning. This all boils down to more exposure, more showings, more offers and normally a selling price in the middle of the "Range" which would be $257,000 to $259,000.

I have sold hundreds of properties using this technique and rarely have a problem with Buyers not understanding it. You will get low ball offers but you are always going to get those no matter how you price the property. The bottom line is if the house is priced properly and the Buyer sees it and likes it he will pay the price.

Explaining "Range Pricing" to the Buyer is very simple. Show them the remarks: This property is "Range Priced". The Seller will consider offers between $249,000 and $269,000 with $269,000 being a full price offer. Very straight forward. If and when the Buyer looks at additional properties they will understand the market value and hopefully make an offer accordingly. The Buyers I have worked with appreciate it that the Seller is letting them know up front that they are willing to negotiate. Buyers love to negotiate!

So try it on that listing you haven't been able to sell. Get some Buyers through the door. Your Seller may be more receptive to trying "Range Pricing" instead of lowering their price. So place that hard to sell listing “home home in the range”.

Posted by Bryant Tutas Broker/REALTOR(R) Tutas Towne Realty, Inc on 07/12/2006 03:55 PM

Comments (56)

range pricing, market value, educational, range price

56 Comments on Home home in the "range"

JUL

2006

New to this blog thing but here goes. My family relocated to Florida several years ago. It so happens that Bryant Tutas was the listing broker/agent on the home we purchased. As Bryant stated his success with range pricing. We are one of the 100's that purchased one of his listings. I will state that our home was range priced and had it not been the chances are that we would have never came up with the property in our search is not very good. For us it was the best home to meet our needs and for a few dollars more, the best deal.

Range pricing is not often used in my area (the Santa Clarita area in Los Angeles County) and thus everyone finds it confusing and misleading here. They look at it like a "bait and switch" and would prefer a single price and then they buyers can decide how they want to negotiate with their initial offer. A good realtor will search for a range above and below the buyers stated price anyways, both because the seller may be negotiable on price and often the buyer may have some price flexibility as well. Your explanation clarifies the range pricing strategy, but I don't think it will be readily accepted in all market areas.

Interesting concept that I haven't heard of. To agree with what Linda said, When I'm working witha buyer I always push the price range around a bit to assure my buyers are seeing everything that might be a possibilty.

Caleb...is this even allowed by the NWMLS? Anyway, like you I always set my price parameter above what the client's stated ceiling as prices are negotiable and market value may well be below the list price.

JUL

2006

Hi there,

I agree that this technique is a little different and when first implemented you may hear negative comments from Realtors who don't understand it. In Florida it is perfectly legal and we actually have a "field" for it in our MLS in Central Florida. I have used this technique almost exclusively for about 10 years in my market area. When I first started and I was the "lone wolf" I heard a lot of negatives but stuck with it because it works. Now it is very common in my area. In my market where the average DOM right now is 78 my last 7 listings have sold in less than 30 days with multiple offers. It's all about traffic and getting people through the door and "Range Pricing" will acheive this. Try it! You will be surprised at the quick results.

JUL

2006

As aonther Realtor in the Pacific NW, I don't know that we "range price" specific properties...although as an Agent working for a client, I will push the search parameters a bit to ensure that we are finding homes that might otherwise be out of consideration. I can think that range pricing is being used on PLAT developments, but even that is slightly different from what you describe.

In plats or subdivisions here, they will offer a starting price range, Low $400's, per se. Then, upon further consideration, the range might actually be much higher than that as the prices used are often the "loss leader" or may have already be reserved or sold. But, I suppose the intent is the same. The draw is the range price, however, the real hook is the quality and impression of the Buyer.

Hi Michelle,

You are right "Range Pricing" will only get them through the door. The property will have to "sell itself" from that point.

JUL

2006

I've never heard of range pricing but it sounds like an interesting concept.

Shannon Moore

AUG

2006

Hi Bryan,

I must first say thanks for all the informative info that you always provide. I do have a question (and it may be silly) but I would greatly appreciate it if you can give me some insight on this. I am thinking of range pricing a listing that I have, this practice is not really done in my market much but I want to give it a try. I did a search and I noticed that if I put a price within the 'range' in the low field the property comes up but not when i try it in reverse...any idea why?

Again, thanks...alot

AUG

2006

Hi Ivan, I'm not 100% sure I understand your question but let me try to answer anyway. The "low" price in the Range will be the listing price and the low price if you have that field. The whole purpose of RP is to have the property show up in searches at the lower price. You must disclose RP in the first line of comments as follows "This property is Range Priced. The seller willl consider offers between $180,000 and $200,000 with $200,000 being a full price offer" In this example the "list" price is $180,000. The "true" target price(market value) is $190,000. Your target price needs to be in the middle of the Range. In a nutshell. If the seller agreed they would sell their house at $190,000 but wanted to list at $195,000 to leave negotiating room. If you RP as the above example, how many more showings do you think you would get with a list price of $180,000 as opposed to $195,000? A lot! More showings, more offers, quicker sale, happy seller. That's it. Good luck.

Ok - I get it, I am going to give it a try with my listing and hope it sells...thanks!!!

AUG

2006

Prudential has done range pricing for a number of years. It works very well in some markets and not so well in others, but I believe it is all in the presentation and serves the listing agent well if they can explain it so it makes sense to the seller. Some markets have a difficult time implementing this type of pricing because of restrictive MLS parameters, but it is a fantastic tool if the agent understands how to use it.

AUG

2006

Bryant, I have not seen this in our area os SW Florida, I'm looking into my MLS parameters to see if it is allowable. What a fantastic idea.

Terri, hello there. Glad to see you on the Rain. "Range Pricing" works like a charm. Whether the MLS in your area supports it or not it is 100% legal. Just make sure you put the comments in the remarks section. Thanks for visiting my blog. I hope you find it informative. Don't forget to join and start your own. The information and ideas you find on ActiveRain are just awesome.

SEP

2006

Hey Bryant,

I have been looking into Range Pricing Tentatively for a while now, and am glad to see your posting. One question I continue to have is "What if my client wants to sell at $200K so I want to range price it at $190-$210K, but my client, has let me know they won't accept anything close to the $190 range." If I receive an offer for $190K, how do you handle that?

I am tentative because it may seem decieving to say the "sales price" is between Low & High, but then not accept a low offer.

I know I'm probably being difficult, but I think just a little more info would help.

Robert,

Sellers are never obligated to accept any offer whether the property is "Range Priced" or not. Sales price is always negotiable. If the true market value of the house is $200,000 then the buyer will see the value and be willing to pay the price. The whole key is the property must be priced right whether it's range priced or not. I've sold hundreds of properties using range pricing and it is very rare the deal does not negotiate to the middle number. There is nothing deceitful about it. You will get negative comments from some Realtors but that is only due to their lack of understanding.

I work for the seller. My job is to sell their house in the quickest amount of time for the most money. If a Realtor working for a buyer doesn't understand "Range Pricing" I just tell them to make an offer and let the buyer and seller negotiate it out. After all it's their deal. RP is actually very simple it is exactly what it says in the MLS.

"This property is Range Priced. The Seller will consider offers between $190,000 and $210,000 with $210,000 being a full price offer."

Very straight forward. It says "make an offer, let's negotiate" Using this sytem will take getting used to. But once you start getting more showings and more offers you will grow in confidence. You won't be able to make every offer work but so what, you will have plenty of them, and your sellers will be very pleased.

My market is dead slow right now. I still sell a house a week and most of my listings sell in less than 30 days. Works for me.

Hope this helps!

SEP

2006

That's great thanks. At this point I think I just have to dive in! I changed a listing last night, so it shows up today. Like I mentioned before, I was already pondering doing this, but hadn't been able to talk to anyone who uses this system.

Thanks very much for your input.

Here Goooees

SEP

2006

I had to repost to let you and anyone who reads know:

I changed one of my listings that only had 3 showings in 2 months listed. I only do 3 month listings 1 of which was via an open house, so I was starting to stress because in a year & 5 months, I haven't had one go expired yet. I've sold them all, and want to keep the streak going.

Late at night on the 18th I placed this house as a range listing. On the 20th, I had two showings!!!! Matching the Realtor assisted showings for 2 months! I haven't received feedback yet, but I'm excited about the first signs that this might work!

Thanks. B

OCT

2006

Bryant, I checked your listings about a month ago and none appeared to have been ranged price. InterRealty's range pricing has not been functional in SEF MLS and wanted to see if it was working in MFR. If you do have one that I missed please let me know.

Stephen the range will only show up in the comments section. Currently I have 13 out of 17 Range Priced properties. The 4 that are not RP are vacant lots.

OCT

2006

Hi Bryant,
After reading your and your wife's post about range pricing I looked into our MLS system in Palm Beach and we have a 'range price' field. Hi Stephen.. Aren't we synced with our MLS' ? (between Broward and PB?) I cant get into the Broward MLXchange right now, but I will look when I can.. i see the field when you try t oedit a listing, a few slots down from the list price.
Needless to say, my sellers are getting a call in the morning, after i do my diligence tonight. BTW, almost no one is using the RP listing technique. I will admit, (and my ego wont admit it) that I didnt know what the RP field was in the MLS. thanks BB and wife..or should I say, wife and BB (since I read it on her post first!) i owe you this little nugget of info.

NM logo BIG nick

OCT

2006

Nick, yes we are. However, 2 things. In the SEF MLS you must input the low price in the LLP field and the full gross listing price in the LP field. And, more importantly - the range price search feature is not currently operational. Interealty has an open repair ticket in this regard and has yet to fix it. Until this occurs it would probably be a waste of your time.

NOV

2006

I would like to try it but being a new agent I am a little apprehensive about doing it. I will talk it over with my office manager. Its sound like a great way to get more offers.

NOV

2006

Very interesting concept!!! I've never heard or seen anyone do that here in Hawaii since I've become a realtor four years ago. I'm going to look into that. Thanks for the interesting idea!!! -Aloha

DEC

2006

Bryant, I just wanted to let you know that I've included this post in the latest edition of "ActiveRain - The Early Days" (July 11-15).

DEC

2006

Bryant, Thanks for the post. This range pricing is a much needed strategy especially for today's market. I am going to bring this up at our staff meeting Tuesday.

DEC

2006

Bryant, I'm just going back through some of your previous posts. Price Ranging, huh? Hmmm.

Geno

DEC

2006

ahhh...that's why they do that! I've only seen it on high price properties in my market. Thanks for the great explanation.

DEC

2006

great post , I will follow your advice.

FEB

2007

Bryant, we are about to take the 'range pricing' plunge and I am very excited! Thanks for such a terrific explanation in your posts, and I will keep you posted as to the results! You rock Carole

FEB

2007

Bryant,

I'm forwarding this to my Broker/Manager this morning. I wouldn't have seen this post had you not linked it in your current post.

Thanks for the idea. VERY interesting sales tactic.

Lucky :)

P.S. Have you ever been to Jamaica? (I learned this from you...thanks!)

MAR

2007

Went back and reread this. Do you range price all of your listings? I would like to try this but am a little concerned about the offers that it cause.

MAR

2007

Judi I RP almost all of my listings and have for years. Right now I have 18 active listings all but 2 are RP. Go for it!!

APR

2007

BB -- I am preparing for a listing appt. There are 2 very similar homes on the seller's street already listed, both with the same exact price. I'd love to try out RP on this listing and know the seller's will love the idea. However, I just explored my MLS and saw there is a box to select range pricing, but no box to enter the high price (just list price and low price). I would put the range in the remarks section, but would this technique still work to possibly increase showings? This method is so new to me, but I really want to try to help my sellers with it. Thanks.

Tina, My MLS is the same way. I use the low price as the list price. So both fields in the MLS will have the same number in them. Then just be sure to use the disclosure in the remarks section. Good luck!!

Thanks for the fast response. I don't know what I'd do without all the amazing advice you and AR provide. Have a great day!!!

And that method that Bryant described is a violation of his MLS policy as it is in most MLS systems. If you do it you're subject to a fine and possible other association sanctions. Death is not an appropriate punishment so do not worry there. Bryant may want to fight in the courts about his claim that it would be illegal if an association did this but most would not.

Yep Tina, Lee is correct. Check with your local MLS first. My battle is one I choose to fight BUT it's not for the faint of heart.

Interesting -- I will definitely check with my MLS. But why would they have an option for range pricing, if it weren't to be used as such?

the low price field is to be where you enter the low price that a seller will consider and the listing price field is what is to be considered a full price offer.

Lee, I have to say it's funny how the MLS has no qualms about allowing a listing to be placed in the MLS $100,000 overpriced but they frown on a properly priced RPed property. It's also funny how they changed the rules 10 years after approving it because the "board" doesn't get it. OK I'm stopping. I promised myself to not debate this issue any more in a public forum. Get's away from me sometimes:)

I will send Tina an email to make sure she understands the risk involved.

OK - I see the difference now. Sorry, but I must have had a mind-freeze. I imagine this is why we don't see it much in our MLS. Too bad for the consumers, we can't use every tool possible to help them.

Tina, If what Lee says is the case with your MLS then the RPing is useless and a waste of time and effort. Being forced to use the "high price" as the list price (against your clients instructions) basically renders RPing useless. So they have effectively done what they set out to do which is eliminate a proven techinique they don't like. Wouldn't want to mess with the old timers.:)

Tina, It's not about the consumer. Never is. It's about folks who are unwilling to change and accept different ways of doing business. It's about telling the owner of a property how they MUST price their property if they want access to the MLS. It's about interfering with agent/client relationships. It's about restricting LEGAL but aggressive business practices. Oops!! There I go again......whoa horsey..let me off:)

Blog Boy...(Broker Bryant)

Like the good little wife that I am I'm reigning you in. Whoa...You Big Horse you. Get down off that soap box before I yank you down. Instead of beating this topic to death why don't you go Range Price another property? It'll make ya feel better :)

Tina...I have sat on our local BOR and MLS as a Director. It has been my learned experience that if the Directors don't understand something they close their minds to it. It's the nature of the Real Estate beast :)

TLW...ROAR!

LOL!!!

TLW - sorry you had to reign in him again ;) Passion for your work is an awesome thing and BB seems to have it in spades. Thanks again.

MAY

2007

I have to tell you I've never understood exactly how this works. And now that I know I might like to give it a try. (Here comes the excuse....) But I'm just not sure how it will be perceived out here in Kansas City. I think I'm willing to give it a try, however. And I have just the property in mind.

Hi Chris, You will certainly catch flack from your peers for using Range Pricing. You can count on it. But it's a price I'm willing to pay to get my listings shown and sold. You might want to review your MLS rules and regs as well. They don't like range pricing. I've been fighting this battle for 10 years. But during the battle I've sold about 400 properties. It's worth the fight.

JUN

2007

I will definitely check on the MLS board about RP here. Anything is worth the try. I have tried a buyer's agent bonus. It brings more showings but it does not necessarily encourage an offer.

In my opinion, RP does encourage an offer. Do you normally see prices in the middle? Or do you see them closer to your low end?

Loreena, Normally the initial offer comes in at the bottom of the range or lower. Negotiations however end up in the middle. But it certainly creates activity for the property.

JUL

2007

What would be the normal reaction of Buyers or Buyer's Agents when they make a low-end offer and you come back at a counter very close to the middle?

And you mentioned that "Buyer looks at additional properties they will understand the market value and hopefully make an offer accordingly". What statements do you actually say to Buyer's Agents when handling this objection of you coming back with a counter "higher" than the low price?