Value Range Pricing: Meaning And Advantages

Many home sellers struggle to set the right listing prices or determine the best selling prices. Most sellers want to maximize their selling prices without alienating potential buyers, but that is not always easy. Value range pricing is one strategy you can use to sell your home. Below is an overview and the benefits of this strategy.

What It Means

The conventional method to price a home is to set a specific price for the sale and hope that buyers interested in your home are willing to pay the price. For example, you can list your home for $350,000 and hope potential buyers won't stray too far from it.

Value range pricing dispenses with ambiguity and sets a price range for which you can sell the home. For example, you can list your home for $325,000 to $375,000. That way, all buyers within that price range can contact you for the deal.

The Advantages

Value range pricing has multiple advantages for both home sellers and buyers. Below are some of these advantages.

Expanded Buyer Pool

Many listing sites group homes for sale within specific price ranges. Many buyers also filter their home searches by price. As such, a specific price is likely to lock out buyers interested in properties just below and above the listing price.

For example, buyers interested in homes below $300,000 might not see your $300,000 listed home. However, a $300,000 home is not out of reach for homebuyers interested in, say, $290,000 homes. Moreover, many sellers with listing prices around $300,000 may accept offers slightly below the price.

Value range pricing expands the pool of potential buyers who can see your listing. The expanded pool may even trigger a bidding way that pushes your home's price above the listing price. In addition, your home might sell faster than it would have with traditional, fixed-point pricing.

Negotiation Flexibility

Value range pricing also gives buyers the courage to reach out to you and negotiate the listing price. For example, a buyer with a $350,000 home-purchase budget might hesitate to contact you on your $400,000 listing even if the house interests them. However, value range pricing of $375,000 to $425,000 may encourage the buyer to reach out and negotiate.

Value range pricing is one of several ways to price your home for sale. A real estate agent can help you with the strategy or other price-setting strategies. Ultimately, however, you reserve the right to sell your home at your preferred price.