In conversations with Realtors during the past several weeks it became obvious that a key service utilized in marketing real estate is completely backwards and could work against exposing a property to perspective buyers. The solution to this issue has also been around for more than fifteen years but was shelved or under utilized during the ten or more year expansion we experienced in real estate sales and prices.

Fluctuations in the real estate market across the country make it exceedingly difficult for Real estate agents to respond to a basic question that all sellers ask; “What is my home worth?” We can research recent sales, pending sales and, current listing information; however, this may have no relevance to establishing the current and future price for the property.

In the early 90’s, while working for an Association that operated an MLS, we were approached by a broker requesting the MLS to look into Value Range Marketing. The broker brought in an individual from Australia, where this concept was originated, to discuss how it would work. The basic premise to Value Range Marketing (VRM) is that all real estate sales are basically an auction. The seller establishes a price, based on information and advice from their Realtor, the information is published in the MLS and the bidding begins. The most significant difference here is that the bidding goes backwards as offers are received from prospective purchasers. Now in robust real estate markets, such as has been experienced during the past several years in many areas of the country, this system worked fine as offers were received over the listed price for the property. With current market conditions the existing system with setting a list price could work against the seller. As an example, if a Realtor or consumer is searching property listing and enters a top purchase price of $150,000, in most sites or MLS’s they would not be provided information on a listing for $200,000. The higher priced listing may have all the features that the buyer wants however they are not aware of its existence. Had VRM been in place the property could have been listed in a range from say $150,000 to $200,000. The listing would have been exposed to the prospective buyer and negotiations could have been initiated with both parties reaching a sales price they are comfortable with. VRM allows the market to establish the final purchase price while providing broader exposure for the property. The system worked well when it was implemented and as far as we know, continues to work today. Additional language needs to be included with the listing information to insure that all parties, and Realtors, legal rights regarding the sale are addressed.

In my opinion, implementation of Value Range Marketing in all MLS’s and Internet searches would be a significant value to sellers, buyers, Realtors and, all parties to a real estate transaction. No agent wants to go back to their seller with continued recommendations to lower the sales price. The market sets the price, listings obtain broader exposure and, buyers are encouraged to submit offers on properties in a true auction format.

A service whose time has come again.