The Lund Team Real Estate Blog

The once dominant pricing strategy of San Diego was used less in 2009.  Only 12% of over 32,000 homes sold in the county used a Value Range.  Value range pricing is when a home is sold with a high and a low price.  For example: “Seller will entertain offers between $500,000 and $525,000”.

The idea is to encourage negotiations between a buyer looking at the bottom end price and a seller hoping to negotiate to the higher end. In 2005, value range pricing was the preferred way to price a home in San Diego County with over 50% of the properties utilizing a range.    It was common to have multiple bidders bid over the “top end” of the value range. 

The current real estate market is remarkably different than 2004 and 2005.  Buyer’s are bargain hunting and look to the low part of the value range and negotiate down.  And the Seller risks overpricing the top of the range and alienating buyers from the offset.  

But range pricing began in a similar down market in 1995.  It proved effective in increasing the number of property showings.  What was found is that with more people walking through a property, even if it was only to “bottom fish” the low price, it increased the opportunity for an emotional attachment to occur and an offer to commensurate. 

The argument for range pricing is the subjective value element of residential real estate.  What is a ”big” backyard? And is it a headache or blessing for it’s owners.  The most common requirment for buyers over the past 24+ months has been:  What are the “comps” and is it less than what someone else paid. 

With the current shortage of property in the under $800,000 market, today’s buyers are not always finding what they want in their initially conservative price range.  Homeowners have the opportunity to push conservative buyers to come physically view a home that they may have disregarded. 

And fall in love and write an offer.