What is PVRM?
PVRM is a marketing tool offering sellers a unique alternative to the traditional fixed price marketing method.
How Does PVRM work?
The homeowner selects one of 80 predetermined value ranges and, instead of a fixed price, the listing Realtor uses the value range in all marketing promotions. These ranges have evolved from data gathered from the National Association of Realtors, The Canadian Real Estate Association and by gathering information from many North American markets where Prudential Real Estate has affiliates who have used PVRM successfully for decades.
Print promotions include the comment "Seller will consider offers between $369,000 and $428,876 (or whatever the appropriate range may be). This, of course does not mean the seller must accept any offer in the range, but rather they will consider offers. The seller is pre-counseled by the listing Realtor that all offers should be appreciated and every effort should be made to negotiate with the offering buyer until the parties come to a mutually acceptable price.
All 80 ranges end in "876" at the high end which alerts brokers searching in MLS that this is a PVRM listing. (“876” = “VRM” on the telephone).
PVRM creates more activity because it indicates the seller's willingness to negotiate. The buyer's attention is naturally drawn to the lower price in the range, whereas a fixed price might have been just above the parameters the buyer is seeking, and would have caused the listing to be missed altogether.
Advantages of PVRM
Eliminates risk of under/overpricing
Eliminates the need for price reductions
Attracts more buyers
Invites more offers - sooner
Usually decreases days on market
Optimizes final sales price allowing true market to determine maximum price
Expands pool of homes to view
Eliminates fear of insulting seller with low offer
PVRM properties are easily identified
Negotiation process is more comfortable
Properties marketed using PVRM often sell faster, and in some cases, for more money
than the seller expected. PVRM introduces properties to more buyers than a traditional fixed-price listing, and creates a comfortable atmosphere for negotiations to begin much sooner in the sales process.
Prudential Real Estate has taken the lead in the real estate industry with this marketing innovation. Click here to view a chart of Prudential Property Marketing Value Ranges.
How do I know which range to select?
Your PVRM certified Prudential Real Estate sales professional is able to assist you in determining the approximate value of your property, based on your local recent market activity.
The ideal value range will have a top value that most closely matches what your property would be listed for if it were a traditional fixed-price listing. The low end of the range ensures that more buyers will be attracted to your property. If that range appears out of line, then move to a range where the desired price
Won't buyers just make an offer at the lowest price in the range?
Buyers typically have their "Wish Price" in mind whenever they make an offer on a property, regardless of how the property is being marketed. Most astute buyers are keenly aware of the approximate market value of the property prior to submitting an offer and understand that their initial offer very often is the beginning of the negotiation process. On the other hand, a seller's motivation can change from day to day. So, on occasion a low offer tendered at the opportune time is accepted as written.
Why would a seller who lists their property at the top value of the range look at a low offer at the opposite end of the range?
Sellers who market their property using PVRM understand that buyers have a "wish" price at which they would like to purchase a property. Extending an invitation to the buyer to begin negotiations at their "wish price" sometimes results in the buyer ultimately agreeing to a more reasonable price once negotiations are underway. And, without the PVRM invitation to start negotiations, that possibility may never materialize in the first place.
PVRM seems to benefit the seller. How does it benefit a buyer?
Most buyers know how much they can and want to spend when looking for property and typically search for property within a "range of affordability". Properties marketed using PVRM will show up in many more "range of affordability" searches, dramatically broadening the number of available properties for a buyer to consider.
If the seller knows they won't accept the bottom price, is that really fair to the buyer to encourage an offer that low?
Buyers nearly always begin their search using a price range lower than they can afford and lower than they are willing to pay...and even too low to include features & amenities the buyer requires. Using PVRM the homes priced reasonably near the buyer's initial search range will be introduced to the buyer at the outset, rather than wasting time wading through lower priced homes the buyer soon realizes are unacceptable. Conversely, the seller typically wants to start marketing at a higher price than the market will bear. In the end, the overlap between the price range the buyer ultimately will be willing and able to pay, and the range the seller will ultimately be willing to accept, becomes the target for both parties, hopefully resulting in a meeting of the minds and a closed sale in a shorter time period.
Doesn't using a range make it look like we don't know what the house is worth?
In fact a home is actually worth what a buyer is willing to pay and seller is willing to accept, and that is a dynamic figure changing sometimes daily based on supply & demand & availability of financing. PVRM allows market driven activity to determine what a property is worth, and allows the pricing to flex with vagaries of the changing market. The listing Realtor®'s role is providing a market analysis to help the seller select the appropriate price range for the property.
Is this as tedious as it sounds?
More showings and more offers do tend to create more work. Tedious maybe, but well worth the effort.
Is it well known and understood in this area?
PVRM is currently being practiced in fifty two states and provinces in North America and has experienced unprecedented support and success by thousands of Prudential Real Estate Network members and cooperating brokers. PVRM has been the standard for Prudential California in San Diego for decades.
Don't other real estate companies use value ranges?
As a matter of fact, the popularity of this program which Prudential brought to this country is growing so fast that MLS software systems are quickly being revised to accommodate value range listings. PVRM however is an exclusive marketing program for the sole use of Prudential Real Estate Network members, however there are other similar programs being developed and used throughout the marketplace. When an innovation works, it's just a matter of time till others follow the leader in copying and imitating success.
We think this is a better way of marketing, both for sellers and for buyers. To get more information on how you can start using PVRM, contact Pam Zielinski today.
Click Here to view the chart of pre-determined PVRM price ranges.