Value Range Marketing Explained
VRM is one of the most innovative concepts affecting the sale of real estate since the Multiple Listing Service.
Highlights of VRM
- Property is offered within a range of value
- More buyers find the home in online searches
- Seller receives more offers
- Marketing time is shortened
- Seller’s equity is maximized
- Price reductions are unnecessary
Pricing is an Art, Not a Science
One of the keys to successful home pricing is to understand that the value or market appeal of a property varies constantly.
Supply and demand, interest rates, availability of financing, property condition and location all influence the value of a particular property. Add to that the marketing exposure and the negotiating skills of the agents involved, and the result is a wide range of possible sale prices. See actual examples of Sara & Daryl’s recent sales using the value range strategy.
How Do We Find True Market Value?
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 both “win”. In the optimal value range price point, buyers will find the property in their searches and are encouraged to make whatever offer they feel is fair. The seller has the option to accept the offer or make a counteroffer.
Value Range Pricing Illustrated
The lower the sale price, the greater the number of buyers qualified to buy the home. As the price point is raised, the pool of buyers becomes smaller. The lower end of the range results in more buyers seeing the property, which gives them the opportunity to consider it. Many home buyers can afford to pay a higher price than they are searching.
These qualified buyers benefit by having access to properties which they might not even know existed if a fixed asking price were higher–or lower–than the price range they are using for their home searches.
For example, if a buyer searches $600,000-$650,000, a home priced at $599,000 essentially doesn’t exist–and it might be the perfect property for them… if only they knew about it.
Benefits to the Seller
Home sellers like the idea that more buyers will know about their home, but they are often 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 also make low offers on fixed price properties!
An Offer is the Ultimate Win
Don’t worry about getting low offers, as long as you have a skilled negotiator representing you in the sale. Your sale can’t occur if you don’t get an offer! When a buyer accepts a seller’s invitation to make an offer within the range, a buyer who wants the home and a seller who wants to sell will often reach 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.
Ask us what the two most common mistakes are when using range pricing, and we’ll show you how to use VRM to get the best possible price for you home in today’s market. See recent examples of Sara & Daryl’s sales using the Value Range strategy.