Selling Using a Range May Bring Top Dollar

Written by Posted On Sunday, 18 December 2005 16:00

Value Range Marketing is increasingly becoming the method of choice for selling homes in San Diego, California.

The concept, which was first born in Australia in the early 1990's and years later brought to the United States by Gregg Toyoma for Prudential California Realty's convention, is changing the real estate industry.

Broker Associate Carlton Lund, of Prudential California Realty in Carlsbad, says it's the biggest change for the industry since the Internet. He was among the first agents to try out the concept in 1995.

"I had a listing that was going nowhere … In 93 days not even a realtor stopped to look at this condo and so I tried the concept of using a range instead of a fixed price and 48 hours later we were in escrow. Upon closing the transaction the single, young buyer said to me that 'If you hadn't used a range I never would've found the condo of my dreams,'" says Lund.

Typically if a home doesn't sell, experts say it's either not priced right or it hasn't received enough exposure. Or it could be that Value Range Marketing isn't being used.

"Last year homes sold 20 percent faster in the San Diego Multiple Listing Service using range-pricing than fixed-pricing," says Lund.

The key in Value Range Marketing is that it creates a bigger pool of potential buyers by creating a dollar span that will attract more buyers to make written offers.

Lund says ultimately it helps buyers get the communication process started to determine what price the seller will actually settle on.

"It's putting your name in the hat in writing to say, 'I'm interested in your property. I'm willing to pay this; what are you willing to come back to me at and what am I finally going to pay?'"

What can frequently happen is that buyers who are set on paying a certain price will not look at or even make an offer if a home is listed even just $10,000 above their price point. But if there is a value range it opens up opportunity and buyer optimism.

Another consideration is that with a fixed price, often buyers will never see a home that they might have considered because they have given specific price parameters to their agent. So during a Multiple Listing Service search the home would not show up unless it fit the price parameter that the buyer had given to the agent.

According to Lund it is critical to structure the range properly.

"If a person has too high a range it's not any better than an over-priced listing. Sometimes people who don't understand range pricing have too short a range, such as a seller will entertain offers from $299,000 to $310,000. That's ridiculous. That's not a range," says Lund.

Prudential California Realty is the only firm to publish its price ranges which end in 876 such as the range $575,000 - $624,876 to denote Value Range Marketing.

"The 876 [spells out] V-R-M on the [keypad] of a phone … it just gives another identifying factor to an agent that's knowledgeable that it is a range price listing," explains Lund.

Today in San Diego County the concept is increasingly being utilized.

Lund says that in recently closed transactions almost 21,000 homes in San Diego used Value Range Marketing, while approximately 15,800 homes were marketed at a fixed price.

Homeowner, Steve Cade, has had six of his properties sell since 1997 using Value Range Marketing. The properties valued anywhere from $140,000 to $4 million.

"Wherever you think the comp is, that needs to be the mid-point of the range," says Cade.

For some sellers that triggers a fear that they'll have to settle for low-ball offers. Cade says that's just not the case.

"To work effectively, if your house is worth $500,000 then that needs to be the mid-point of the range and when you do that it casts a bigger net and frequently the negotiation process brings the price back up to the market value," says Cade.

And with more buyers making offers it can cause the price to increase even more than the seller's originally targeted price.

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Phoebe Chongchua

Phoebe Chongchua is an award-winning journalist, an author, customer service trainer/speaker, and founder of Setting the Service Standard, a customer service training and consulting program offered by Live Fit Enterprises (LFE) based in San Diego, California. She is the publisher of Live Fit Magazine, an online publication that features information on real estate/finance, physical fitness, travel, and philanthropy. Her company, LFE, specializes in media services including marketing, PR, writing, commercials, corporate videos, customer service training, and keynotes & seminars. Visit her magazine website: www.LiveFitMagazine.com.

Phoebe's articles, feature stories, and columns appear in various publications including The Coast News, Del Mar Village Voice, Rancho Santa Fe Review, and Today's Local News in San Diego, as well as numerous Internet sites. She holds a California real estate license. Phoebe worked for KGTV/10News in San Diego as a Newscaster, Reporter and Community Affairs Specialist for more than a decade. Phoebe's writing is also featured in Donald Trump's book: The Best Real Estate Advice I Ever Received and The Complete Idiot’s Guide to Buying Foreclosures. She is the author of If the Trash Stinks, TAKE IT OUT! 14 Worriless Principles for Your Success.

Contact Phoebe at (858) 259-3646 or phoebe@livefitmagazine.com. Visit PhoebeChongchua.com for more information.

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