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Broker sold on ‘value-range pricing’
Victor DeFrisco listed his suburban Lake Worth home earlier this year at $469,900. No interest. Then he dropped the price to $459,900. Still no takers.
So DeFrisco decided to try a pricing strategy that brokers in some parts of the country swear by: He listed the house not at a single price but at a range of $439,900 to $469,900. Within two weeks, he had a contract for $450,000.
The success sold DeFrisco, owner of Exit Realty Premier Properties, on the strategy known as value-range pricing.
It’s a concept that has been around for years but remains a novelty in most of the nation. In San Diego, however, the majority of listings are sold through value-range pricing. San Diego County agent Carlton Lund says the tactic helps homes sell faster and for more money.
However, Tim Allen, a real estate professor at Florida Atlantic University, co-authored a study on value-range pricing that finds the tactic has no effect on how quickly a home sells, or for how much.
“The property is the property, no matter how it’s marketed,” Allen says.
But DeFrisco is sold on value-range pricing. The tactic lets sellers cast a wider net. The buyer who bought his home was looking for properties priced under $450,000, which meant DeFrisco’s house never hit his radar screen when it was listed at $459,900 and $469,900.
Without value-range pricing, DeFrisco says, “He never would have even seen that house.”
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Comments
By Steve
October 4, 2006 09:50 PM | Link to this
Now that sounds like a good idea. The median Palm Beach County home can be marketed as a value range of say $100,000 to $350,000.
By Erik Pariseleti, Realtor
October 5, 2006 11:15 AM | Link to this
If it works, great!. With only one example you really have to wonder if that same buyer would have found it anyway and made an offer. When I search for properties I always search 5% over the price a customer gives me. If we see something that may be higher but they love, it does’t cost them anything to make an offer. If we can’t get price down we move on.
By Steve - listen and learn
October 5, 2006 11:27 AM | Link to this
Steve’s I.Q. has a range of -10 to 0!
Remember, median price means half of sales were under and/or over the average sales price.
Why don’t we just say then the median price in Palm Beach County is $100,000 to $800,000.
What you pay is what you get.