Mitch Canin, the Canin Group

(520) 907-6526

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Mitch Canin portrait

Mitch Canin

35 Years Experience – Over 1500 Transactions

  • Dedicated
  • Exacting
  • Compassionate
  • Innovative

Phone

(520) 907-6526

Office

  • 7423 E. Tanque Verde Rd.
  • Tucson, AZ 85715

Email

Canin.mitch@gmail.com

Range Pricing

ITS BENEFITS EXPLAINED

Realtors walk the fine line of dereliction of duty when their discussion of how to price the seller’s property omits a discussion of range pricing.

When compared to a specific list price, “Range Pricing” has been a viable and effective pricing option nationwide for well over 20 years.

When contrasted to offering a home for a specific price, “RANGE PRICING” establishes a numerical range in which the seller will entertain (accept or counter) a buyer’s offer. As opposed to listing a home for say $452,500, the same seller may find it advantageous to inform the real state community and public that they will entertain/respond to offers in the range of $440,000-$460,000.

When sellers receive an offer, they have 3 response options: 1) Accept the offer, 2) reject the offer or 3) counter the offer. Two of the 3 options, accepting or countering, constitute “entertaining” the offer.

So, what exactly are the perceived benefits for a seller who implements range pricing? There are at least two.

ADVANTAGE #1: RANGE PRICING INCREASES THE NUMBER OF SHOWINGS   

When prospective buyers establish price parameters for their home search, one of those parameters is a price ceiling. It’s quite common for a buyer who may qualify for $460,000 to instruct their Realtor not to show them anything over $440,000 or say $450,000. Why? Just as buyers establish geographical, square footage and aesthetic boundaries, they also establish price ceilings. These self imposed price ceilings typically reflect the difference in what a buyer may qualify for and where they are comfortable.

If seller Mr. Smith lists his home for a specific list price of $452,500 and Mrs. Jones has instructed her Realtor to cap the search for homes at $450,000, Mrs. Jones will never see Mr. Smith’s home. However, if Mr. Smith range prices his home at $440,000-$460,000, it will show up in Mrs. Jones price range and she will come to see Smith’s home.

Obviously, a seller’s ability to generate offers is directly tied to the number of showings his home generates. So the first distinct advantage of range pricing is increased showings.

Those sellers unfamiliar with range pricing typically will say, “But Mitch, I want to get at least $450,000 and if my house is range priced $440,000-$460,000, why on earth would anyone offer more than the low end of the range, $440,000? This seller misses the point because he can’t sell his house without first getting an offer and if a seller’s goal is $450,000, an offer of $440,000 is definitely an offer worth countering.

Most importantly, the verbiage on a range priced listing does not say, “Seller will accept offers of $440,000-$460,000, but rather “Seller will “accept or counter” offers of $440,000-$460,000.” In a range priced listing, the seller only obligates himself to the high end price while at once promising to at least counter any offer that honors the low end of the range.

ADVANTAGE #2: RANGE PRICING POSITIONS A SELLER TO SELL FOR MORE THAN THE SPECIFIC LIST PRICE THE SELLER WOULD HAVE CHOSEN.  

When compared to listing a home for a specific price, range pricing gives a seller an opportunity to sell for more than the specific price that would have been chosen.

For example, a seller has a choice; list his home for a specific price $452,500 or employ a range wherein the seller agrees to “accept or counter” offers from $440,000-$460,000. If the seller lists for $452,500, barring the unlikely scenario of competing offers, the house will not sell for more than the 452,500 list price. However, by implementing a range of $440,000-$460,000, not only will the low end of the range bring in more buyers but the seller gives himself an opportunity to negotiate counter offers at amounts higher than the $452,000 list price alternative.

In summary, I always explain both pricing options available to a seller and let the seller decide which one best suits their circumstances and financial personality.

Once the twin benefits of range pricing are explained, a substantial majority of my clients opt to range price.