Value Range Marketing is NAUGHTY!
The anxious buyer asks: "
"Why do realtors list homes with range pricing, knowing that their seller will not take the price at low range?"
"We put in an offer in at the low range level and the seller countered at mid point to high....stating FIRM. We walked away. Just don't understand why the seller would allow the broker to list this way when they would never take the price at the low-level point. Seems like a waste of time for everyone."
I say price it right upfront. There is no need to present a $70,000 price spread by saying "we accept offers between $200,000 and $270,000. The theory behind this pricing tool is that more buyers will be looking in"the range" than if the property was simply listed for $229,900. Two things about this tool that I would like to point out.
1) The seller is deceived into thinking that they could get the higher end of their range.
2) The buyer is lead to believe that he could purchase at the lower end of the range.
Agents representing sellers should provide a service to their clients. Using market trend data, knowledge of the neighborhood and past sales to determine a price for a property is not rocket science. Who needs someone to tell them what their home is worth in a broad spectrum? Zillow can do that with more accuracy than Value range pricing.
In other parts of the country, the Multiple listing service (MLS) is set up to handle value range pricing as a marketing option. In New Hampshire, this is not the case. There is no such option in our MLS. So how and why do Realtors use value range marketing?
While listing a home in the Manchester New Hampshire and surrounding areas, your only option is to select a list price. Using the above example, the Realtors that push this nonsense will list the home at $200,000 in the MLS but in the remarks, it will say value range listed between $200,000 and $270,000. In other words, the seller may consider offers between $200,000 and $270,000.
The goal is to get more buyer eyes looking at the property that otherwise may not have if an absolute price was chosen. Better exposure is what they say. I say it is a bunch of CRAP! We have had many buyers call us asking us to show them a few homes and one of them is value range priced and the buyer doesn't know what it means or is unaware that VRM is even stated in the listing paperwork
Sometimes sellers are talked into doing these kind of things by sweet and fast-talking real estate agents who don’t explain both the pro’s and the con’s. They will use their swagger to get you to price this way when competing with other Realtors. Or, give the seller an unrealistic price just to get a listing. Don’t fall for it!