Hat tip to the reader who sent in this good explanation about variable-range, or value range pricing:
http://www.zillow.com/wikipages/Variable-or-Value-Range-Pricing-for-Homes/
The author takes a neutral stance, and notes that it hasn’t caught on much outside of San Diego (I haven’t heard of it being used anywhere except here).
I also like the point that listing agents should have sellers prepped to entertain offers at the bottom of the range:
Of course, we always make sure our sellers would actually consider an offer at the lower end of the range before advertising it! To do otherwise would constitute misleading “bait and switch” advertising.
In the 10-15 years of range pricing, I haven’t found a buyer yet who likes it.
I think the article premise is wrong. I believe that with value range pricing the auto-populate sites (redfin, Zillow etc…) typically list the price as the top end number not the bottom number, thereby potentially taking the house out of some searches (especially if they straddle a major price-point. 979,000 – 1029000 won’t show up for someone searching a million or less, for example. Maybe the big sites have fixed that glitch, but it used to be that way.
Can’t imagine any buyer not thinking that the low end of the range is the number. Of course, it is up to the agents to make sure everyone knows that the ‘real’ price is the number right smack in the middle. If the listing agent didn’t price it that way, shame on them.
I’ve always wondered, if an agent brings a ready, willing and able buyer with an all-cash offer right on the low number, and there are no other offers and the seller refuses, is the buyer’s agent entitled to the commission?
The article was written in 2012, and portals have grown since then. She was referring to the MLS picking up the listing based on the lower price, which is accurate today and about the only good, factual reason to do the range. The rest are theoretical, like ‘it starts the conversation’, or range houses sell faster or for more money.
Ok, but still, specifically, Redfin’s site searches and reports based on the high number, not the low number, and doesn’t show the range. Not sure about Zillow since it is so littered with outdated info and only captures a fraction of what is really on the market I don’t look at it anymore (except to keep a mental note of which agents try to double end deals by posting to Zillow a few days or weeks before it hits the mls…)
Yes it is a mess now with the portals.
Realtor.com shows the range at the very bottom, and the rest don’t show it at all so it is a(nother) surprise to buyers if they see it on marketing materials at the house.
You’ve known my views since the days before I guest hosted this blog that long ago. Why would I want to so much as deal with someone who when asked what time it is takes your answer of 2PM and decides it is between 2:30 and 4 in the afternoon?