ArrowsI have several properties that are range priced.? Even though I thought I had explained it well on the listing I immediately received some phone calls from Realtors wanting to know what I was doing.

So this post is an attempt to explain it better.?

We all know that in a market like ours where we have more rural properties instead of huge developments full of identical homes it is impossible to price a property at it?s exact value.? When we do the comparables we really can?t tell if the location compared to the similar property 6 miles away increases the value by $5,000 or by $6,000.? We honestly can?t tell if the neighbors junky yard decreases the value by $3,000 or by $6,000.?

In fact, most of us don?t even factor those particular issues into our pricing even though we KNOW it does make a difference.? It?s just not possible to know exactly how many dollars up or down these more esoteric differences make in the value.?

By the time you compare 3?4 houses to the one you are trying to price it is easy to have differences of $10,000?$15,000 that aren?t even factored into our price.? We can easily make adjustments for square footage, lot size, qarage size, age, and more but we can?t tell exactly how much difference the noisy gravel pit or the smelly dog yard will make in the price.?

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We are usually fairly confident that a price is somewhere within a range.? Sometimes that range is more than $20,000 and sometimes it is close to $8,000 but it is a range.? How are we to predict exactly how each buyer will look at a property.? A house may be worth $20,000 more or less to one particular buyer because the in-laws live next door? ?but that?s another issue.?

When we range price a house we acknowledge that fact and the seller is also up front about it.? The seller is willing to look at offers within that price range.? That doesn?t mean he/she will accept the bottom of the range.? It does mean that she might accept it, depending on the fine terms of the offer.?

Since the listing contract obligates the seller to pay a commission if a full-price-offer is procured it is necessary to identify that amount.? The top price of the range is the full price offer.? It is expected that the house will actually sell for a price somewhere below the full price and somewhere above the low end of the range.

Here are a couple other explanations of range pricing.? By a financial planner?, By a Realtor who has used range pricing for years.