Understanding Value-Range Pricing

Posted on Dec 21, 2018 in Home Selling Tips, Newsletter Article

California real estate professionals were the first to introduce a concept called value-range pricing, also known as variable pricing or range pricing. Instead of one listing price, the seller can list a pricing range and deepen the pool of buyers who may be interested in the home.

The advantages are many. Some sellers are more comfortable using a price range for their home, rather than a specific price that feels too high or too low. The seller’s home appears in a broader number of results when a real estate professional or a buyer searches for homes online. Home buyers shop in a range because they want to see the best homes available that they can possibly afford.

Getting as many buyers as possible to look at the home is crucial for sellers. If a buyer’s search parameters are limited to between $300,000 and $330,000, they won’t see the home that’s listed for $335,000. The value range selected by the seller may be $325,000 to $350,000, which would put the home in front of the $330,000 buyer.

There are some drawbacks to value-range pricing. It can impact comparisons, because MLSs that employ it tend to use the upper end of the price to create reports, which can skew the results upward. These reports are passed to consumers, who may not understand what value-range pricing is.

If you’re a seller, ask your real estate professional if value-range pricing is an option in your area and if it’s appropriate for your home.

From Chuck Barry’s December 2018 Issue of the Berkshire Hathaway HomeServices Monthly Newsletter.

© 2018 BHH Affiliates, LLC. Real Estate Brokerage Services are offered through the network member franchisees of BHH Affiliates, LLC. Most franchisees are independently owned and operated. Berkshire Hathaway HomeServices and the Berkshire Hathaway HomeServices symbol are registered service marks of HomeServices of America, Inc.® Information not verified or guaranteed. If your property is currently listed with a Broker, this is not intended as a solicitation. Equal Housing Opportunity.

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