What is Value Range Pricing?
A Buyer Agent called me with a question about the remarks that were entered in a specific listing in the MRIS system. The remarks made a referenced to "Value Range Pricing." The Agent wants to know what that means.
This is a marketing technique that was originally developed in Australia. I think the best explanation of this term is a definition from the South Central Wisconsin MLS Corporation (that I have edited slightly to remove any reference regarding their MLS rules for entering these listings).
Value Range Pricing:
"Traditionally, when a property is listed for sale, it is placed on the market at a fixed price. Under value range pricing, the property is marketed within a range of values, rather than one specific price. It is important to understand that value range pricing is simply a marketing tool which brokers and sellers can elect to utilize (or not)."
My understanding is that some brokers and agents in our area did experiment with the value range pricing about 5 or more years ago. Some people at the time believed it would be the next big thing in the real estate industry. The way it worked was is that under value range pricing you did not use a specific price but a range (i.e. $245,000 to $255,000). The idea was to let everyone know that the seller would entertain offers within the price range and to encourage buyers to negotiate.
I am not completely clear on why it did not catch on in the area at the time but according to news reports at that time the Metropolitan Regional Information System was not originally set up to properly display prices in a range (it has since been updated to allow this practice).