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Garner

Beach Fanatic
Here is a press release we recently submitted regarding a new marketing and pricing strategy that we are employing at Davis Properties of NW Florida



HOMES ON THE ?RANGE?



Seaside, FL - Marketing properties for sale in a price range instead of a fixed price can often spur interest and get real estate sales moving in a down market or encourage multiple offers in a sellers? market. Called ?Value Range Marketing? or ?VRM,? properties have one list price but are marketed within a predetermined price range. This simple marketing strategy is designed to bridge the gap between the Seller?s high opinion of value and the Buyer?s desire to purchase for the lowest possible price. Sellers agree to entertain offers based on price terms and conditions within the advertised range. It encourages open negotiations with a seller who will come down and a buyer who will go up in price. Compromises are frequently negotiated to reach a final price, terms, and conditions that are acceptable to both parties.

The concept, which started in Australia in the early 1990?s and was adopted a few years later in the United States, is changing the rules for real estate. For example, in San Diego, California, over half of the homes sold last year employed Value Range Marketing.

Davis Properties of NW Florida, Inc. is the first brokerage firm on the Emerald Coast to offer VRM. Larry Davis, Broker and owner, says the strategy is ?similar to fishing with a net instead of a single hook?. The key in Value Range Marketing is that it creates a larger pool of potential buyers by exposing them to properties that were previously viewed as unattainable. The result is more buyers which create more written offers.


About Davis Properties of Northwest Florida, Inc.: Davis Properties has been in business and located in Seaside, Florida since 1992. During that time, Davis Properties has been a key player in marketing many of Northwest Florida?s major developments, including Rosemary Beach, Sunrise Beach, Preserve at Grayton, and most recently, Owl?s Head in Freeport, Florida.


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Smiling JOe

SoWal Expert
Nov 18, 2004
31,644
1,773
So how does an agent, searching the MLS, know that the property is using VRM, when only one price is entered into the MLS? If you don't open the listing, you are unaware of the range. I think buyers are already confused on prices of real estate, and with VRM, I think they will be even more confused. I do like the idea of trying something new, and there has been discussion of VRM in this market for a while, but I have not been sold yet.

From a buyer's prospective, why would I offer $400K for a home in the range of $370k-$400K? In a buyers market, will anyone write an offer on that home at $400K?
 

Garner

Beach Fanatic
Thanks for asking,
The last 3 digits of the sales price on a VRM listing are 876. When you see a listing whose price is 876, it is a VRM.

In a down market, it would be unlikely that anyone would offer the top end of the range. The sellers who have opted to try this method are aware that any offers will probably be in the lower end of the range, and it's negotiable from there.

The listing language states:
This property is offered as ?VRM ?Value Range Marketing. The seller(s) will entertain offers based on price, terms and conditions within the range of $xxx,xxx and $xxx,876.

It is important that buyers, and their agents understand that the low number of the range is not the new asking price of the property. It is a starting point for negotiations.
 

Smiling JOe

SoWal Expert
Nov 18, 2004
31,644
1,773
Thanks for asking,
The last 3 digits of the sales price on a VRM listing are 876. When you see a listing whose price is 876, it is a VRM.

In a down market, it would be unlikely that anyone would offer the top end of the range. The sellers who have opted to try this method are aware that any offers will probably be in the lower end of the range, and it's negotiable from there.

The listing language states:
This property is offered as ?VRM ?Value Range Marketing. The seller(s) will entertain offers based on price, terms and conditions within the range of $xxx,xxx and $xxx,876.

It is important that buyers, and their agents understand that the low number of the range is not the new asking price of the property. It is a starting point for negotiations.

DavisProperties,
Thanks for your reply. I think you hit on a good point regarding agents needing to understand the concept. Have you considered asking Geoff, at ECAR, if it is possible to post something regarding the $xxx,876 in ECAR's E-briefs, notifying the agents who read the ebriefs?

Again, I don't know that this area is quite ready for VRM, but if all agents were aware of the intent and purpose, and were able to explain it to buyers and sellers, then it could serve a great purpose. One other group you have to educate are the buyers who search properties online, without an agent -- most will not understand the concept.

As Bobby J says, good luck!
 

Garner

Beach Fanatic
DavisProperties,
Thanks for your reply. I think you hit on a good point regarding agents needing to understand the concept. Have you considered asking Geoff, at ECAR, if it is possible to post something regarding the $xxx,876 in ECAR's E-briefs, notifying the agents who read the ebriefs?

Again, I don't know that this area is quite ready for VRM, but if all agents were aware of the intent and purpose, and were able to explain it to buyers and sellers, then it could serve a great purpose. One other group you have to educate are the buyers who search properties online, without an agent -- most will not understand the concept.

As Bobby J says, good luck!

Great suggestion to include it in the E-briefs - we're working on an e-mail to Geoff right now! We'll also include a flyer with this Friday's Flyer Express for the local Realtors.

Thanks -
 

bdc63

Beach Fanatic
Jun 12, 2006
303
22
Md for now, but dreaming of SoWal
It is important that buyers, and their agents understand that the low number of the range is not the new asking price of the property. It is a starting point for negotiations.

I don't get it. If it is a strategy to get sellers out of denial about what is happening to their property value, that's one thing. But you can't honestly believe that in this market a buyer will not consider the low end of the range the new asking price ... heck, I'd assume the "negotiation starting point" was the low end less 20+%.
 
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Pirate

Beach Fanatic
Jan 2, 2006
331
29
So I could just start at the lower end of the selling range and then negotiate in the 30-50 percent off range? :D
 

Smiling JOe

SoWal Expert
Nov 18, 2004
31,644
1,773
Can I get a new Mercedes-Benz if I make an offer in the mid-range:rotfl: :funn: :rotfl:
I guess that depends on your lender and the price variation in the range.

You guys are killing me. As I said, presently, I think the trouble with VRM in this area is that most buyers are just going to laugh and call the seller crazy. I think I hear some of the choir , above, singing.
 
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