Range Pricing

[jonathanmartin]

What do you think about range pricing? I have never done it, but I have heard of some great results.

The home is put into the MLS at a price lower than what the home is to be sold for, this increases traffic. Then in the marketing note a line is placed that reads Seller will look at offers from 300-340k. With 300 being the price listed in the MLS. The Seller will turn down all offers under there set price of lets say 320. This gives more people a chance to walk throught the home. If they fall in love with the home they will find a way to come up with the extra cash:)

[Malok]

What do you think you are on? The game show: The Price Is Right?

"I'll bid $1, Bob"


Why don't you just put FREE as the list price?

If you are going to drum up traffic - might as well go big, right?




I'd think you'd end up getting in trouble from the MLS (I'd encourage the person to check the rules and terms of use carefully), state licensing laws and NAR.



AND - even if it is allowed by the MLS, state licensing laws and NAR, it would add to the sleaziness factor. If a person is such a douche to try and use a cheesy tactic like that, what else are they concealing/not disclosing/misrepresenting.


I'd probably advise my clients to NOT even consider the property as the agent is a dirtball - and refuse to show ANY of the other agent's listings ever.

[jonathanmartin]

"Broker Bryant's Real Estate Ramblings" is where I found the idea. I have never seen it in practice. I doubt that it would put a seller in a good position during negotiations, but this guy swears by it.

[Codythebest]

I agree with Malok. This is dangerous.
I truly believe that if a buyer just say he's buying it, at the price and terms set by the seller on the MLS, the seller just must sell the property.
In this example, if the buyer make an offer at the MLS terms and price, the seller has no choice than to sell, even if "he won't accept anything below $320K". If he won't, buyer should and will sue...

And again, as written by Malok, where's the limit?
I put my home in the MLS for 10 bucks, but wont' accept anything below 1 million??..I mean...C'mon...

[jonathanmartin]

Now come on. I may never price a home using ranged pricing, for many reasons. But a Seller is under absolutely NO obligation to sell their home until they sign a P&S. Depending on the Listing agreement they may actually owe their agent a commission if a full priced offer is brought to the table, but no obligation to a buyer.

There are several phases of negotiation in the sale of a home; the asking price is just the first. What about the inspection contingency, or even a feasibility contingency. All buyers try to get a little more each round, and rightly so. We all know that a full price offer is never that, unless we are in a very competitive market, WE'RE NOT.

Must is definitely too strong a word.

[Greg]

Now come on. I may never price a home using ranged pricing, for many reasons. But a Seller is under absolutely NO obligation to sell their home until they sign a P&S. Depending on the Listing agreement they may actually owe their agent a commission if a full priced offer is brought to the table, but no obligation to a buyer.

Exactly. They would owe their agent a commission and in turn that agent would owe the selling agent a commission. We enter into an agreement to pay a commission when we enter a listing in the MLS.

[jonathanmartin]

So lets say this agent that took this listing as a range priced listing. If they are the representing broker and they spell the terms out in the contract, Even in the marketing remarks or additional comments. Then this line applies.

From Exclusive Sale:
If (a) Broker procures a Buyer on the terms in this Agreement, or on other terms acceptable to Seller; or (b) Seller directly or indirectly or through any person or entity other than Broker, during the term hereof, sells the Property; then Seller will pay Broker a commission of _____

So if the Listing Agent took the listing as a range priced listing, then I don't think that commission would be owed.

[Malok]

Yes, its true you don't have to accept a "full price offer" - as the terms of that offer could be so absurd, that it prohibits the offer from having any merit.

i.e. You have a house for sale for $500,000.

I offer to buy your house today for $1,000,000.

Is that a good deal?






Great. I'll give you $1 a year for the next million years. Or, I'll give you $1 million and we'll set the closing for August 13, in the year 2379.

So, obviously terms can make a difference.




Regardless, I stand by my statement that EVEN IF the MLS, state licensing laws, and NAR allow this type of behavior - this is still sleazy, misleading and deceptive.


How would you feel if Best Buy ran a front page ad saying:
New in Box 60" plasma Television on sale today for $49


And then you read in the fine print at the bottom:
TV price is $49, plus a $8000 handling and processing fee


How long would Best Buy stay in business operating in that fashion?


Any agent I saw pulling this would get put on my list of Dirtball Agents that I do NOT show their listings or do business with under any circumstance.

If you still feel that this is a "good marketing strategy to use" after checking with the appropriate licensing and terms of use - go ahead.

Just remember, its hard to get a good reputation. But you can generate a bad reputation pretty darn fast. Good luck.

[Codythebest]

Now come on. I may never price a home using ranged pricing, for many reasons. But a Seller is under absolutely NO obligation to sell their home until they sign a P&S. Depending on the Listing agreement they may actually owe their agent a commission if a full priced offer is brought to the table, but no obligation to a buyer.

There are several phases of negotiation in the sale of a home; the asking price is just the first. What about the inspection contingency, or even a feasibility contingency. All buyers try to get a little more each round, and rightly so. We all know that a full price offer is never that, unless we are in a very competitive market, WE'RE NOT.

Must is definitely too strong a word.


If I buy a property offering what's in the purchase contract, and seller change his mind, I'll sue for specific performance. If I'm able, willing and ready, a judge will convey...
So, one way or another, deed will be transfered...
So, yes, seller must not sell. But it'll happen anyway...

[jonathanmartin]

offering what's in the purchase contract, and seller change his mind, I'll sue for specific performance.

Not until the P&S is signed by the Seller. They aren't under obligation to sell at that price. The exclusive Sale Listing agreement only binds them to pay an agent not sell their home. They don't have a contract with a buyer until they review and sign an offer. If they refuse to sign an offer then so be it. It is a free country and until they sign the contract with the buyer they don't have to sell.

Now I am not sticking up for any home owner that does this, but it is their right. Earlier this year I put a full price offer on a home for a buyer and the seller decided to take the home completely off the market, for whatever reason. Since they never signed the P&S, no contract. Check with your Escrow Attorney, I did. Pissed me and my Buyer off, we had no recourse.

[Greg]

Now I am not sticking up for any home owner that does this, but it is their right. Earlier this year I put a full price offer on a home for a buyer and the seller decided to take the home completely off the market, for whatever reason. Since they never signed the P&S, no contract. Check with your Escrow Attorney, I did. Pissed me and my Buyer off, we had no recourse.

Twice, I had sellers refuse full price offers and both times I told the listing agent to have the seller write me a check for my commission. Both times the listing agent told me the seller didn't owe me a commission and I told the listing agent that while that was true, they, the listing agent did owe me a commission per our MLS agreement and they should get the commission from the seller. The listing agents were due the commission per their listing agreements and I was due my commission per the MLS agreement.

Both properties closed because the sellers did not want to pay without closing. You should have forced the listing agent to make the seller honor their listing agreement. What are contracts for?