There was a time....long ago and far away, or so it would seem, when "Variable pricing" was all the rage..the theory was that buyers would be attracted to an "opportunity" to write an offer that was acceptable to the seller(s) between $X and another figure a bit higher...a good bit of at least five figures. This is not a marketing plan we have ever used, and in fairness to the "long ago and far away" agents...there was a time when it seemed to work for them,
What sellers need to know is that when a buyer...OR an agent searches MLS....qualifying this....at least in OUR MLS....the higher number is how the listing is indexed and will appear in a search. That means that unless a buyer CAN write at the "upper end" of the variable price....they never see the listing.
It may not be everywhere....(qualify, quantify....real estate is local) but Price is KING, QUEEN, PRINCESS AND PRINCE in many markets throughout the country...so why would an agent position a seller's home at the HIGH end when the middle or lower end be what the market dictates ? Maybe because it is not what the seller wants to hear....they want to hear...higher...their house is better than_____....in the end....when the listing expires, the days on market roll along....the variable is that the house did not sell....and that will not make sellers very happy at all.
Sally K. & David L. Hanson, ABR, CDPE, CSS, e-Pro,ILHM, REDS
Hard to believe, but there still may be listing agents out there that feel flattering the sellers with an unobtainable price is the best way to do business. This only waists every body's time and money. In a declining market the seller only stands to lose more and the agent failed to advise them correctly.
The worst part is...it gets them the listing....and gets sellers thinking that all realtors are......well you know.....
Good morning Sally and David,
Inappropriate listing prices set unrealistic expectations for the seller. Their goals and dreams will be shattered and they will point the finger at you for not being honest and direct with them. Definitely not a win/win situation..everyone looses!
Out here the lower end of the price range is the price used to index the property.
I think when Prudential started variable pricing way back in the 1990s, it was a new and innovative idea. It still works for marketing. For example, I've noticed that if a house is listed at a range of, say, $375,000 to $435,876 (to use Prudential's system of 876 as the last three digits) and sells at $379,000, the agent can say that the home sold for 1% higher than the listing price.
When Prudential first started the system, all of their offices showed selling prices for all properties that were higher than the listing price. It looked pretty good when an office could say that the average selling price was 15% higher than the average listing price!
As Paul Harvey would have said, though, when you got the rest of the story, you saw what was going on. I think the public has now caught on.
_________
Come join the fun in ActiveRain's Guerrilla Marketing Team Contest.
Can't fool all the people all the time...who knew Wisconsin and California would index just opposite of each other !
Hello Sally, Never was a fan of variable pricing. It seemed to confused buyers as to what was going on, bet it worked fine during the boom day of competition, as we see now many paid top price with competition. Gone are those days!
Got that right write Mary...I think it is deceitful to the Seller....and makes them think there is a glimmer of hope that the high side will be what they get...oh not...it IS all about the price, not variably...positively !