LOL!!!
Value ranges were originally intended to avert low ball offers; it created boundaries ensuring the seller would get a price in or usually above their bottom line. The buyer would have a sense of the seller’s bottom and could more easily guess the price based between two numbers. (it is a modern version of cattle prodding)
This was hatched 2001-02 at the beginning of the boom and has had unquestioned success for the seller. Basically the mentality is I can control how we negotiate.
Negotiation has not died but it has for some time been buried alive the good news is it is making a come back.
Example:
Using 600-650 implies if you plan on bringing anything to the table it better be above 600 and pretty close to 650K.
Hence forth this is a typical deal on a value range property:
Buyer initial offer 610K seller counters 640K seller counters 615K seller counters final meets in the middle 627,500 who just got the deal?
How a house used to be priced was by using comps for the area (as in neighborhood no not Kensington for Normal Heights or Talmadge for College area or Carmel Valley for Mira Mesa) comps in your neighborhood based on sales in the last 30-60 and 90days. The comps give a base line and then the upgrades, yard size, pool, and views are factored in.
The best course of action when dealing with ranges is to get a list of closed deal in the time period indicated above and get in your car and drive. Take the sqft average $ and multiply it by the sqft of the property you are interested in that equals a fair market value.
Take that price and minus 10-15% to establish you initial offer.
Here are some of the things I have heard of late: that is not in range~
Response I am very interested in a counter and you are obligated to present every offer to your client if there is a no to be had let the client be the one to give it. If some one does not deal~it is because they are OVER PRICED
This statement is supported of course by your comps, knowing mathematically what the value of the property is.
