Beware of Range Pricing

Selling and buying real estate takes patience, meticulous record keeping, great organization, and most important a lot of research.  There are several ways to sell a property, listing with an agent, selling by owner, auctioning the property or listing the property using range pricing.

Range pricing is when the property is listed with a price range; for example 123 Normal Blvd is listed for $160,000 but the sellers will accept offers starting at $120,000.  This marketing tactic gives buyers a lower starting point but with an open range price you never know what the real selling price is.  With this type of marketing There are almost always multiply offers with many people submitting contracts closer to the starting number but the seller not accepting them but rather holding them until the price escalates to a satisfactory or acceptable level.  If you submit an offer and you are the only contract often times the listing agents will use that as fuel to call other agents to solicit more bids thus escalating the price.  The problem for the purchaser is you typically will never get an answer on your offer until there have been several offers submitted and then maybe an opportunity to raise your offer.

The best way to counter this if you feel you are offering a fair value for the home is to put an expiration date on the contract; which every real estate contract has a section for. This eliminates the possibility of the sellers holding and marketing your bid for too long. Buyers should stay away from range priced listings. They are vague, sketchy at best, and you will find yourself waiting, waiting and waiting for nothing more than drummed up artificial competition that will drive up the cost of the real estate.  Sellers should be also concerned with this for the simple reason that many Agents will not even bother showing these homes due to the lack of concrete pricing and the overall headaches that come with trying to truly represent their clients with such a vague listing tactic. For the best exposure set the price at what you and your agent feel the fair market value is.

 

 

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