This is a great post on value range pricing. And the comments are as informative as the post. Every buyer who I have worked with who was interested in a property that was priced this way was extremely put off by this tactic.
Do You Use Value Range Pricing When Listing A Home?
Larry And Sheila, Realtors with Charles Rutenberg Realty recently showed a home with a value price range, which we usually don't like to do. This house had everything our buyers were looking for and we decided to show it to them. As we thought, they loved it and made an offer. The house had a listing range of $450,000 to $525,000.
Human nature will tell you that a buyer is going to make an offer on the low end and in our recent experience, even lower than the lowest listing price.
We called the listing agent before presenting our offer and she said "before you present any offer, I want you to be clear that my sellers won't consider any offers other than close to the higher price or full asking price".
Huh, We don't get it, then why are you listing it from $450,000 to $525,000?
"Oh, that's so no one goes under $450,000". Okay, just to be clear, will they accept an offer of $450,000?
So, this made no sense at all to us or to our buyers.
Our buyers were disappointed and said not to show them any homes in the future with price ranges.
Our theory and consumers alike feel that If the low end of a value price range was an incredible bargain, wouldn't a buyer grab it as soon as it hits the market?
In our opinion, if you price a house fairly, an interested buyer will be more inclined to negotiate. Variable range pricing may be a tactic used by some agents, but not with Larry And Sheila.
We have been told by other agents that value price marketing “gives people the opportunity to think they have the chance to negotiate.” We find it to be a useless ploy and distraction. When our buyers see that on a listing, they automatically take the lower number as the asking price, as we do.
When we get a listing, we want to get a house sold as quickly as possible and try and price it right at the beginning. Value price marketing may work best in an appreciating real estate market, but in a slower market, it's best to list the home for sale at a fixed price. A seller must realize that if they decide to go with a variable price range and think buyers will look at the top price, they are mistaken because the buyers are thinking the lower price. It seems like a waste of time for everyone! Pricing with some wiggle room, may be the best system.
When you're ready to sell your Long Island home, or looking for one to buy, please call Larry and Sheila at 631-805-4400.
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