Why would you range price your home to sell it?

When Range pricing first came to Madison Wisconsin, I shied away from it. I did get a good background on it was too new in the market to be acceptable.

Now it is well known but it has really not been used to it's full extent. Now, in a slower market, I have embraced it almost totally. After a number of swift successes, I feel like I am some what of an authority on the subject.

It is still a bit of an unknown to most clients, agents are better informed but I still get questions like why wouldn't people just bit the base price.

So I thought it time to create a consumers guide/explanation.

First a bit of background, then I will give a good example of how it has just worked.

Let's start with it's origin. Range Pricing was thought up in Australia in a slow market.

It was scientifically tested and actually worked to increase the likelihood of an offer in a slow market.

Range pricing was designed to have a 20% range. ( ie on a house prices at $200,000, the range would be $40,000) The idea was to offer an incredibly low bottom end price to get buyers into the property. I think most of us have heard of creating a feeding frenzy as a pricing strategy. Well this is similar. Only you are suggesting that the listed price is a low and negotiations are from there up, not down.

If you can get a flurry of showings early in the listing, not all will bring an offer, not all will offer above the low end, but someone will value it at higher than the low end. And spurred on by the presence of other offers and a skillful negotiator/practitioner, will go higher to ensure capturing the home.

So what about the question of buyers bidding only the low end?

Well, doesn't it depend on the price? Don't buyers and sellers set the price? If a buyer thinks that the price is good, and there is competition, won't they go higher? If they know the home is overpriced, and no one else in bidding, won't they low ball still?

So here is an example of one that has just worked so well for me. see this listing which was a featured listing in www.Localism.com. (bear in mind that the market is such that many homes are just sitting, but this is a very convenient, popular central neighborhood).

My sellers worked really hard to follow my suggestions and stage the home. Then we placed a price of $179k-189k on the MLS as 179k+. We had 9 showings set up in 48 hours.

I was delighted to use and practice my negotiating skills, even before an offer appeared to indicate to customers that it was priced incredibly well and we expected to be at the high end.

One by one the offers rolled in. 3 in total, from 6 showings( we cancelled the rest). We played each off and with out even issuing a counter offer, we had buyers rewrite offers higher till we were above the top of the range. (I can not disclose how much). Result, offers written to suit the seller and happy sellers

I priced another home more aggressively, range priced $199,900-220,000, a 10% range. We had 3 showings, but 2 offers already in a slightly slower response time of 2 weeks. This was a little risky because of the large price range, but I wanted to get listed under the price break of $200k.

Did I get it sold? Yes. It took 10 days of hard negotiating, and the price wasn't quite as high as we might have hoped, but we did get an offer accepted, again well above the low end.

Although the recommended range is 20%, in our market, agents often fix a range of $5,000 or about 2%. This really does not do enough and is basically a fudge for bad pricing or giving in to sellers demands.

Real Estate Guy sells residential real estate in Madison Wisconsin. www.RealEstateGuy.net

Unrepresented sellers beware!

I have experienced similar experiences before, but I borrowed this blog from Ann Cummings. She has such a good extreme example of why Realtors are worth their value- even if that value is not appreciated.
see post




I'm working with a great young couple, looking to buy a new home for their soon-to-be growing family. After meeting with them for a buyer consultation, we began emailing them listings that had potential for them to look through. They would drive by those that sounded appealing to them, and from there, they'd let me know which ones looked interesting enough to see the inside. A little while back, we had 3 in one of the towns in the surrounding areas around Portsmouth New Hampshire. We picked a day and time to meet up, and I went to work making the arrangements for the showings.


In the process of getting the listing agents' contact information on each of these houses that they wanted to see, I came upon the instructions on one of them to deal directly with the seller instead of the agent. What? Ugh! Sure enough, when I pulled up the full internal MLS sheet, there were these instructions, "Please contact Owner directly at 603-xxx-xxxx for showings, property information, negotiations and closing without the participation of XXXX Real Estate."

Great - just what I wanted was to have to deal directly with an owner instead of a listing agent. I have to think I'm not the only agent who feels that way when we encounter an UNREPRESENTED SELLER like this one in the Statewide New Hampshire MLS. My mind was running around, thinking if this is THE house my buyers want, that means I'm the one who, while representing MY buyers, will have to deal directly with this seller every step of the way, instead of the agent they paid to get into the New Hampshire MLS.

So, okay, I do a quick attitude adjustment, pick up the phone and call this seller directly to set up a time to see this house that found its way into the MLS with no real representation. Ring - ring - ring......answering machine picks up, and I leave a message saying who I am and what company I'm with, and that I'd like to show her house on Saturday late morning, and ask her to please call me back to confirm.


THREE days later, I finally get a returned phone call, and she starts in saying that Saturdays are just not great timing for her to have showings on her house. Couldn't they please look at it some other day? I very nicely explained that I'm working around their work schedule, that they've already driven by the house, and that they'd really appreciate being able to see it that Saturday late morning. BIG sigh from the other end of the phone, and then I'm told that she just really does NOT want showings except during this very tiny windows of time on 3 days during the week. I didn't really say anything at that point, and then she finally said, "Well alright, if they REALLY want to see it, I guess it won't get sold if they can't look at it. Right?" She actually asked me that question!

So Saturday arrives, and we stop by this UNREPRESENTED SELLER's house. She sees us pull up, and she comes out onto the front entryway, waving her arms all over the place. As we walk up to the entryway, she acts like we're her long lost friends that she hasn't seen in ages. This, after acting like she didn't want us there at all when talking to me on the phone!

We go inside, and are greeted with a very nice and inviting beautifully remodelled living room with the double-sided fireplace with a fire burning in it, and along with a spacious eat-in kitchen. My buyers and I all remark about how lovely these rooms are, and they really were. At that point, this seller starts talking so much, we could hardly see the rest of the house. Goodness, I just wanted to turn to her and ask her to please stop talking, but I didn't nor could I have made myself say that either.

The rest of the house left MUCH to be desired, almost like it was part of another house. No work done to the bedrooms or bathroom at all - peeling paint, nasty carpet, tiny bedrooms, etc. And she's still yakking so much we just wanted to escape. Have you ever been on a showing where the listing agent just talks so much you just want to scream at them to shut up? I have, and it's terrible, for me and for the buyers. They just CANNOT see the house because of all the yakking. This seller was just like that....

We finally escape the confines of the house with her, and head out to the porch and back yard. She's still yakking up a storm, but at least being outside we felt like we weren't so trapped. I asked about the lot lines, and she told us where they were. And she didn't stop there, oh boy, no she didn't. She SHOULD have though! We proceeded to hear all about the "idiotic neighbor" on one side and the troubled kids down the road a couple of houses. Then she told us about the neighbor who rides his riding lawn mower up and down the road at various times of the day and night. Oh, and don't forget about the roosters in the back that crow at all hours and never stay in their own yard, which she just thinks is so cute. Good grief!!

As we turned to leave, I thanked her for the showing. My buyers had already given me the eyes and the body language saying, "Get us the heck out of here!", I knew this was not the house for them. So, I did just that, for them AND for me.

The seller called me the next day to see if my buyers were going to buy her house, and she wanted to know when I would be bringing her an offer. She said all that in about 20 seconds, before I could say a single word. You think she's a tad bit anxious?? I gave her my buyers honest feedback - they felt the house was too small and the price was too high for what the house had to offer, especially compared with the other homes we saw that same day. I didn't even mention the concerns they had about the neighbors.

What she said next and how she said it really caught me off guard. She literally YELLED at me over the phone and said to me, "how dare you bring a buyer to my house who had no intentions of buying it!!" Silence on my end....and more silence from me.

Then she proceeded to say, in a slightly calmer voice, "after all I told them about my house and the neighborhood and all the work we did fixing it up, they have NO interest in buying it?" She also, for some reason, decided to tell me that she knew "she could do a better job than any agent could because she knew her house better than anyone, and she also knows the neighborhood better, too". And on top of that, she "knew she'd be able to save on the commission, too - so why on earth wouldn't everyone try to sell their houses on their own?"

Very calmly and softly, I said to her, "No, Mrs. Seller, they don't want to buy your house." Then she told me that "HER AGENT" had told her "that would happen, and that he'd be surprised if she got any showings at all". I thought about telling her she really doesn't have "her own agent", that she is an UNREPRESENTED SELLER with no one working FOR her but her, and that even she is not working for her. But I just did not want to get into that with her, because her manner and her attitude told me that she could care less about all of that, and I'd be wasting my time.

Yes, her house is still listed for sale, with those same instructions and at that same overpriced price point. Does that surprise you? Not me, not after the way she treated me and not after experiencing the way she "showed" her house. Not one bit..... My guess is she has treated every other agent that same way, and who knows what she does to the buyers who call her direct.

I just don't understand why sellers want to go it alone. I know some sellers are fortunate enough to sell their properties on their own, and that's great. But the vast majority of sellers who try to go it alone really don't know all the work and effort that goes into marketing and selling homes for those sellers who hire us to represent them and their property. (end of Anns piece)

Thanks Ann, an insightful blog. I work really hard to get the best exposure for my clients in Madison Wisconsin. Homes I list are well presented and show up just about anywhere on the internet a buyer may look. I also work hard to prevent the type of mistakes an unrepresented seller may make. There are plenty out there and I have seen my fair share.