Who doesn't want a great home at a steal? "Hey Tom, show me the crummy houses and make sure they're over priced." Never heard it, never will. I might be able to fill that order, as crazy as it is. But you know what order I can't fill, and it's equally absurd? This one: "Tom, show me the best homes, in the best locations, and priced below market value." If those homes exist, I've never seen one. But everyone wants one. I think, even in a tough economy, the customers will line up for great homes in great neighborhoods, if the home is underpriced. And then what will happen is the competition will push the price up to fair market value, or close to it.
Back in the mid 1990's a marketing strategy came to the west coast via Australia and eventually moved east to the other coast, and the strategy was called Market Range Pricing, or MRP. The purpose of MRP was to get conservative, but qualified buyers, to come and look at homes priced above their comfort zone. California has seen more drastic market swings than the rest of the country over the decades, so they were ripe for a tool that might spur competition where none exisited. MRP worked because it is basic human nature to feel a need to be conservative until we feel a desire to be comfortable. Well, I don't know if that's basic human nature or not, but it sure seems logical.
This humanitarian crisis may be a good time to employ MRP in Dane County because we sure are lacking motivation from conservative would be home buyers. Not everyone is going to live in a van down by the river, or even shack down by the lake, but everyone appears to be cautious about keeping more money in the bank, or mattress, than they are thinking of spending on a house. Prices may be falling in neighborhoods where demand is next to nill, and a firm price doesn't move with the market. In fact, the market moves away from a price and there you sit.
Consider MRP with a wide enough range to reach down to the most conservative buyers who are qualified to purchase at your price. Bring them in. Invite them to compare your home to others they're seeing. It's possible they will decide that it's better to spend a little more than they planned, instead of less than they should, and own a home that has more of what they want to be comfortable.
MRP works a little bit like an auction and a little bit like normal shopping. The owner is not saying they will accept an offer at any price, but they will consider all of the terms of all offers. It your offer price reflects a value supported by recent sales, you have a good chance of owning a great home, in a great location, at a fair price---maybe even below market price. Click Here to see a great home in Madison Market Range Priced from $210,000 to $235,000.
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