Fun With Real Estate

Value-Range Pricing

I read an interesting article about value range pricing recently. For those who don't know, value range pricing is where a broker will list a property for sale priced as offers invited between two price points. The low price may be 10-15% below the expected selling price and the high-end price may be 5% over expected market value.

The theory behind this is that it attracts buyers at the low end who might not otherwise see the property.

It is clear that while some realtors support this strategy, the majority do not (at least not yet).

Apparently this practice originated in Australia where it became quite prevalent.

What was surprising for me was that I have been advising a client in Australia on selling his investment property there and, in talking with the Agent, I discovered that nobody in her area seemed to be doing value range pricing. Now this may have been a regional thing, just as it appears to be in the US, but it did get me wondering if perhaps we’ve started doing something in the US that has already proven to be counter-productive in the land where it was originally put into practice.

Maybe someone out there know and would like to offer an opinion?

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