As some of you may remember I was a HUGE fan of Range Pricing for many years. When we first opened Tutas Towne Realty 13 years ago Range Pricing was our UVP (Unigue Value Proposition).
I haven’t used Range Pricing since the market changed in late 2006. It made a lot of sense when the market was moving upward. It doesn’t make sense today.
You can see by the comments in this article that many agents didn’t get it and some buyers didn’t like it. But none the less it worked. My properties sold quicker and for more money using this technique. Fortunately for me I worked for the seller and didn’t really care what the agents or buyers thought. I just wanted to sell the property for my seller.
In my market right now properties are selling on average for 102% of the asking price. So it’s really no different than when we used Range Pricing. Back then, 2006 and earlier, my properties were selling for almost 104% of asking price.
In the current market, where banks are pretty much controlling things, the technique being used is pricing low and creating bidding wars. It’s like the old days of Range Pricing. The only difference is there is no top of the “Range” being mentioned.
Foreclosures and Short Sales are now selling with multiple offers to the highest bidder. What I was doing 15 years ago, that was very controversial then, is now the norm. Funny how that happens. I guess we were just way ahead of our time.
My advice to buyers now is the same as it was then. Make your offer based on the value of the property NOT based on the asking price. The asking price doesn’t mean squat. It could be too low or it could be way high. Have your agent do an analysis on the property and then submit an offer that has a chance of getting accepted.
Buyers who base their offers on asking price instead of the value of the property will end up without a property to buy. This is true in ANY market.
By the way here’s a link to a market analysis I did for one of our buyers. He was well informed and his offer was accepted. What say you?