Frequently Asked Questions

 

RANGE PRICE MARKETING

 

What is Range Price Marketing?

 

Time Residential Range Price Marketing (RPM) is an innovative new way to market real estate which

removes the need to set a fixed asking price for a property, and solves many associated problems.

Traditionally, Sellers have listed their homes at a fixed sale price, usually above the true market value:

for example it is not unusual for a home which may be worth between $135,000 and $140,000 to be

listed for say $149,000. Unfortunately, many potential Buyers looking in the $140,000  range will not

look at that house; at least not until the Seller later reduces the price. However when the price is lowered to a level which attracts some Buyers, say $140,000, the Buyers will want to pay even less again.

 

With RPM, the home is listed in a preset range which – for example $135,000 to $150,000. Advertising

for the property states that the Seller will entertain (or consider) offers in that range. The goal is to get more potential Buyers to inquire about the house, and to encourage more offers on the home, opening

negotiations much sooner than with the fixed price process. Research has shown that, even if listed at

true market value, on average, fixed-price listings may only be seen by 40 per-cent of the potential

buyers. RPM is designed to encourage inquires from all the qualified Buyers.

 

 

WON’T BUYERS ONLY MAKE OFFERS

AT THE LOW END OF THE RANGE?

 

No. What RPM does better than any other system is allow the market to determine the true value of a home. Buyers will make their offers based on how much they want a certain home, how many other

buyers are interested, and how much they think the home is worth, based on comparable properties for sale. Remember, the idea is to attract more Buyers, and to start the negotiating process earlier. If

buyers do not view a property because they are put off by the unappealing fixed asking price, there is

no possibility of an offer. The Buyer and Seller may still go through the common process of counter

offers, but provided both sides have some flexibility they should reach a price agreeable to both.

 

 

DOES RPM AFFECT THE TIME TO ACHIEVE A SALE?

 

The average time to sell RPM listings is significantly lower on average than fixed price listings. Agents

have experienced reductions as much as 1/5 of the average time for fixed price listings.

 

 

IS THE SELLER SAYING THAT THEY WILL

ACCEPT ANY OFFER WITHIN THE RANGE?

 

No.  Remember the ranges were set by the broker, Not the Seller. The seller is saying however that

they will judge the merits of an offer when it is presented. It is important that many Sellers take factors other than price into account when considering an offer. For example, whether the offer is contingent on anything (such as finance approval or the sale of another home) and the length of time before the closing.

 

 

DOES RPM ONLY BENEFIT SELLERS?

 

No. In fact, Buyers like RPM every bit as much as Sellers. They get the opportunity to see more homes suited to their needs, so they have a better gauge on what’s available and what comparative properties are worth. RPM makes Buyers feel more comfortable about making an offer on a home. Let’s face it – most of us don’t like to talk about money. It’s awkward. Most Buyers don’t want to risk insulting a seller by making an initial offer that the Seller may think is completely unreasonable. With RPM, for the first time, the boundaries where positive negotiations can take place are clearly defined. Buyers know exactly in what range they can open negotiations, secure in the knowledge that if their offer is not accepted, the Seller will not be offended and negotiations can continue in a spirit of goodwill.

 

 

HOW DO AGENTS FIND RPM LISTINGS IN THE M.L.S.?

 

 

RPM listings will enter the MLS system coded to indicate that they are a range marketing property. Listings are entered at the high end of the range. So when agents are doing a search they will should use the high end of the range to ensure they locate RPM listings.

 

Because of the attraction of the low end of the range to Buyers, Agents acting for Buyers will find it easier to show RPM listings. This is good for everyone including the Seller.

 

 

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