I am on the MLS committee for our local association of Realtors and we have several disputes that have been presented to us.

I would like your comments on how your association/MLS views and requires inputting listings with Value Range Marketing in your MLS system. Do you have a special range field or requirement for this type of marketing? What price is used in the List Price field?

We do not have a field to input a listing "range" and the local agents are inputting a price, just above the lower price in the "range". This is proving to be confusing & disappointing for many buyers and agents as they are under the impression that an "offer" within the "range" would be accepted by the seller(s). I know that they are using the word "entertain" but we all know that we must present any and all offers. Therefore, a seller is already entertaining offers.

Example:
List Price in MLS: $170,195

Statement in Agent remarks:
Above price reflects VRM #26: Sellers will entertain offers between $170,000 and $195,000.

This case involves a selling agent submitting an offer (cash, no contingencies) for $170,195 (the lower price in the range) and the offer was countered at $195,000 (the upper price range).

The selling agent then asked the listing agent "under what circumstance the Seller would consider the $170,195" that was in MLS as the list price. The verbal response was that under no circumstances would the Seller consider $170,195. The selling agent then asked for written confirmation, yet only received a curt response via fax that the counter stood at $195,000.

Thank you for any comments and for sharing how your association/MLS handles this type of marketing.

Thank you!

I am an agent with Prudential- and overall no one in our area uses VRM for reasons similar to the one you presented. Here is an article from our Knowledgebase on MRIS, our MLS. I don't think it fully answers your question, but this is how it is handled here.

-Andrea

Article ID: 21561
Last Modified: 06/16/06


Value Range Pricing (VRP)
Question/Issue
What is Value Range Pricing (VRP) and how do I use it?


Resolution
Value Range Pricing or VRP, is one of the hottest new trends in Real Estate. VRP will provide the seller with the opportunity to achieve a premium price above the standard method of "fixed value". VRP is designed to attract offers, open negotiations and achieve the maximum sales price for your property. For example, a home is valued at $500,000. It is listed by the agent with a VRP of $475,000 to $525,000. This exposes the property to more buyers who might not have crossed paths had the listing been at a higher fixed price. MRIS allows agents to enter a listing with VRP.

To enter a listing in Keystone using a VRP:

Open your listing to the General Information page.
Next to Value Range Pricing select Yes as your option.
Click on Save.



4. Under the Value Range Pricing field, the Low Price field is now shown. This field is mandatory and the lowest acceptable price must be entered.



5. To search for Value Range Pricing listings in Matrix, you must add two search fields to the search screen. These are VRP and ListingLowPrice.



When using the VPR field in Matrix you are given two options, Yes or No. By selecting No, the system populates the Low Price to be equal to the fixed listing price. By selecting Yes, only listings which an agent has specified the low price in Keystone are shown. Usually, the list price is higher than the low price.

If the price is specified in both fields, ListingLowPrice and List Price, the system will return results to match both criteria. Most agents expect that when the ListingLowPrice is $500,000 and the List Price is $525,000, the search should bring all listings with list price of $500,000 to $525,000 but this is not the case. The system is going to look for all listings with low price of $500,000 AND a list price of $525,000. The listings will have those exact numbers as added into the search fields. The ListingLowPrice field is a different field from the List Price field.

The best results are achieved when only one search field is used, either ListingLowPrice or List Price. Yoiu can use price ranges on both fields.


Disclaimer
The information provided in the MRIS KNOWLEDGE BASE is provided "AS IS" without warranty of any kind. MRIS disclaims all warranties, either express or implied, including the warranties of merchantability and fitness for a particular purpose In no event shall MRIS or its suppliers be liable for any damages whatsoever including direct, indirect, incidental, consequential, loss of business profits or special damages, even if MRIS or its suppliers have been advised of the possibility of such damages. Some States do not allow the exclusion or limitation of liability for consequential or incidental damages so the foregoing limitation may not apply.

Thanks Andrea! I appreciate you taking the time to reply!

I've never heard of VRP. Is this becoming commen?

Several years ago the agency that I was with at the time (an old Better Homes and Gardens franchised broker) attempted using VRP pricing to stimulate sales. It compounded a number of problems and ultimately we went back to traditional pricing.

I will say this.. I can see VRM working in a sellers market very very well. Example.. CMA values the house at 260k, but you don't want to limit yourself to just 260 (2005) so you list it in a VRM range of say 255 to 270 ( I don't know the actual ranges, sorry). In a seller's market, VRM could work fabulously for a seller. Buyer's would be more likely to offer a bit towards the higher end of the range I would think if it was a competitive market. In today's buyer's market, I don't know that I can come up with a good reason to use VRM.

As far as listing a property's list price at the low end of the value range, my gut says it shouldn't be done that way. If not the top of the range, then at the very least the dead middle of the range, with comments as to the value range the sellers will truly consider. Just my thoughts...

-A