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Wisconsin Real Estate

Variable Range Pricing (VRP)

What Does Variable Range Pricing (VRP) Actually Mean?

smiley_confusedThe meaning of Variable Range Price sometimes called Value Range Pricing is largely defined by how a Listing Agent has explained it to the Seller: and these definitions vary from agent to agent. The one consistent element in all the definitions, however, is that a VRP discloses a low and a high price.

Possible Definitions of Variable Range Price

  1. It’s the range of prices within which a seller will negotiate a final price.
  2. It’s a continuum of prices the seller pairs with what they perceive is the “risk” involved with any given offer.
  3. It’s a “threshold filter” the seller uses to screen out offers they don’t even want to consider.

 

VRP is Still a Negotiation

With Variable Range Pricing the Buyer and Seller still have to agree on a price but with VRP the Buyer has a BIG ADVANTAGE over the Seller. How so? Well, knowingly or unknowingly, the Seller has “tipped their hand” by exposing the bottom of their negotiating range.

As a Buyer Agent, we don’t know how close to their bottom number the Seller will go or what conditions they need to see to get there. All we know is: they are prepared to negotiate around their bottom number.

This means there is no reason to exceed the bottom number of their Variable Range Price at first, as unlike the Seller, you don’t really want them to know your “negotiating range.”

 

Negotiating Strategy

At first you might think negotiating a price on a listing with a Variable Range Price will be complicated. Not so. From a negotiating perspective it doesn’t really make any difference what definition of VRP the Seller is working under. Why you may ask? Because under any definition of VRP they have already given away their negotiating position… before you ever write an offer.

  1. Make an initial offer below the low end and let them accept or counter.
  2. Make a second offer at the low end to encourage negotiation around the bottom of their range not the mid-point or high end.
  3. Make the offer as clean as possible so they have very little to object to.

 

Want to Negotiate a Winning Price on any Home with Variable Range Pricing? Nelson & Associates can help you do just that.

Contact Jon Nelson today, and let's get you the lowest price a Seller will accept on your dream home ASAP!

Jon Nelson Signature

Jon Nelson, MBA >
CRS, ABR, GRI, SRES, SFR
Principal Broker/Owner
Nelson & Associates REALTORS
www.MadisonREALST8.com
Jon@JonNelson.com
608-438-5230

 

 

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