How Does Range Pricing Work?
Pricing is an Art, Not a Science
Before range pricing can possibly make sense, we need to remember that the value or market appeal of a property varies constantly. It’s pretty much a moving target.
Factors Affecting Property Value
Supply and demand, interest rates, availability of financing, property condition and location all contribute to the value of a particular property. Add to that the exposure a property receives and the negotiating skill of the agents involved, and the result is a wide range of possible sale prices.
So if value is a moving target, how can we ever expect to find it? The answer lies in the fact that a home simply is not worth one specific price. Rather, there is always a range of value within which the buyer and seller each “win”. In the correct value range price point, buyers will find the property and are encouraged to make whatever offer they feel is fair. The seller has the option to accept it or make a counteroffer.
Benefits to the Homebuyer
Buyers benefit by having access to properties which they might not even notice if a fixed asking price were higher–or lower–than the price range buyers are searching. For example, if a buyer searches 600-650K, a home priced at $599,900 essentially doesn’t exist–and it’s a property that might be perfect for them.
Benefits to the Homeseller
Sellers like the idea that more buyers will know about their home, but they are afraid they’ll receive “tons of low offers”. In a marketplace where a multitude of homes fail to sell, receiving offers is a good thing, and buyers will also make low offers on fixed-price properties!
An Offer is the Ultimate Win
The point is that a sale can’t occur if an offer isn’t made. When a buyer accepts the seller’s invitation to offer within the range, a buyer who wants the home and a seller who wants to sell will often reach an agreement, and do so in a much less adversarial manner than if the buyer began the process by low-balling a fixed asking price.
Range Pricing, used correctly, dramatically reduces market time due to the increased exposure the property receives, and can easily make the difference between a property selling–or not selling at all.
Contact us to find out more about how to use this “secret” to your advantage!