1/29 Marketplace rpt on Portland bubble

Chris

Did anyone hear this yesterday evening on NPR's Marketplace? It was a Marketplace report about how the crash has affected realtors. It was one of the most entertaining things I've heard in a while.

Direct quote: "I think, I'm sorry, but the media has caused this frenzy, and so a lot of buyers are fearful".

Link: http://marketplace.publicradio.org/disp ... m_realtor/

rose-colored-coolaid

Listened to it, and one thing caught my ear. She recommended sellers use "Value Range Marketing"

So, what is Value Range Marketing? Instead of setting a price, the seller sets a price range. Say, they want $400k for a house, they might set the range to be $350k to $410k. Looks kind of weird doesn't it? Then the buyer is supposed to see that and say, great, I like the house and I'll offer $350k (obviously). Then the seller looks over the offer and says, "I don't really want to sell for $350k, I just agreed to look over the offer. In fact, I can't sell for anything less than $395k" At which point, the seller either is so exasperated he/she walks off, or is so entranced by the sellers beautiful and attractively priced home that he walks away.

At least, that's what it looks like to me. My question is, how is this any different than a bait and switch. If I went to Best Buy and saw a TV for $900-$1100, I would try to buy it for $900. If they then refused my offer of $900, I would not only leave without purchasing the TV, but I'd stop going to Best Buy all together.

How can Realtors (R, tm, c), a profession now more universally despised than lawyers (and maybe bankers), play a game like this without expecting it to blow up in their faces? They are literally trying to trick people into loving a hosue so they can raise the price!!!!!!

Markor

Might be a different strategy. You try to buy the TV for $900 and the manager hems & haws, but relents when you stand your ground. You think you saved $200 but instead you just bought a $900 TV for full price. They want $400K for a house they're selling? They Value Range (tm) it from $400K to $450K.

rose-colored-coolaid

So, in the TV example the normal way to do it is put a sticker price that you think people might pay, but do what you can to make it clear you will consider negotiating on price. Price it at $1000, and maybe I'll offer $900, which you accept but the next guy might just buy it at $1000.

Anything that it's known the price is negotiable for, you typically price it just low enough to get people's attention, but no lower. Everyone knows a house is negotiable. So, if you have to get at least $400k out of it, price it at $419k, and accept the $400k offer. That should get people's attention. If you price it $400k to $450k, then $400k no longer seems like I'm bargaining you down, it's your initial offer.

Hugh Dominic

So much is wrong with that piece...

Its all the medias fault...

Charles Dean

WHOA!!!! Portland has a housing bubble too? CRAP.

Hector

haha, it was ok for the media to help them pump up prices on the way up, but now that the entire economy is faling it's the media's fault for reporting on the slide.

That's almost like saying 'We'd rather the people not be informed so that we can continue selling real estate at inordinate price levels'.

What a maroon...

rose-colored-coolaid

Hector wrote:

That's almost like saying 'We'd rather the people not be informed so that we can continue selling real estate at inordinate price levels'.

I think they'd be fine if the media just helped misinform people so they would buy at any price. High, low, it's all better for agents than people sitting it out on the sidelines and banks seizing properties, neither of which provide transaction fees for agents.