Range Pricing
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Using Range Pricing
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According to researchers at Cornell University, people perceive precise prices as lower than round prices. Or how about range pricing? In this strategy, a house might be priced in the $399,900 to $450,000 range so the home shows up in two price searches: $450K and under, and $400K and under. Another trick is pricing a house just shy of an even number, for example, $399,900 rather than $400,000, because the odd number seems cheaper and buyers tend to delimit their housing search around such round numbers.

Have you ever wondered about homes that are listed for sale at $599,000 to $650,000 or $999,000 to $1,200,000? What does it mean? And, is the Seller obligated to accept an offer at the low price? Should you list at a set price or at a value range price if you’re going to sell your home?  We’re going to try to give you an answer to those questions, and ask for your opinion on the concept of range pricing. 

            It’s been reported that the value range pricing concept originated in Australia, and then was first used in California in 1995 in Carlsbad. The idea is to offer property at a price range that will entice buyers to look at a particular property, and will encourage the parties to start negotiating toward the goal of reaching a mutually agreeable price. Let’s say that you’re a seller, and you’d like to sell your property for $1,000,000. You might list your property with an agent for sale at $1,050,000 to give yourself some negotiating room or, if you agreed with the concept of value range pricing, you might list the property at a price of $$975,000 to $1,075,000. Because of the way people today are searching for properties on the Internet this would mean that the people searching for homes between $900,000 and $1,000,000 would find your listings, as would those people search for homes above $1,000,000. 

The typical value range priced listing provides that the seller “will entertain offers within the range,” but is not obligated to accept an offer in the range. The seller agrees to counter offers made in the range. What we have found, today, is most offers begin at less than the low list price of the range, but, at least, negotiations get started. What we have found is that value range pricing is advantageous to sellers even in the kind of market we have today.