Saturday, October 28, 2006

It Worked For Bill Clinton, K.I.S.S. -- Just Price It Right!

This is a topic I've been meaning to address for a long time, but reading Bonnie Erickson's take on it this morning made me decide to put it off no longer. In the real estate industry, as in many others, when the tried and true is no longer working we look for a new road to travel. Value range marketing is not new. It's been around for years, but with waning sales and unhappy sellers this marketing device, unnecessary in our area of Long Island during the boon years, has been taken out, dusted off and is in reruns in your local real estate theater.

The theory, flawed at best, was if you couldn't get homeowners to come down to a price at which their home would actually sell, you could cajole them into what seemed like a more minor adjustment, hence the "range." An example: home was listed at $699,000, going nowhere. You make the adjustment to $599,000-$659,000 -- believing the lower end is where it's more likely to go, but making it more palatable to owner. If you truly believe it might sell at the high end of the range, why not just price it there. The problem as I see it is that any buyers (or their agents) seeing the range is looking at the low end, while sellers are anticipating offers at the high end. I think this one is a lose/lose for everyone.


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