Offer range before the walkthrough, or no number until I'm inside?

Question

I gave a range on a first call last month and it cost me the deal.

Long tenure owner, absentee, house had been on a rental for years. From the data and two exterior photos I said 155 to 175 depending on condition. Walked it nine days later. Roof was at the end, the sewer lateral had failed and been patched twice, and the kitchen floor had movement under it that I priced at joists. Real number was 138 and change.

She heard 175 first. 138 was an insult by then, and she was right to hear it that way. I lost her to someone who probably paid 150 and will find the same lateral I did.

The argument for the range is that you get to a yes or no on price fast and you don't drive an hour to learn the seller wants retail. Most of my dead time last year was walkthroughs on houses where the gap was never going to close.

The argument against is what happened above. Anchoring high and correcting down reads as bait, and you only get one anchor.

Middle version I'm testing is a range, but only after I've asked six condition questions and priced the answers pessimistically, so I'm quoting 138 to 152 instead. Sellers hate a low range less than they hate a cut. I think. Scope creep on a rehab is the same disease as this, I just move the number instead of the budget.

bmoreno23 · Answer

Starting from nothing here, so the part I don't follow is how you get to 155 at all before seeing it. What are you actually pricing off? If it's square footage and a comp, then the range isn't a condition estimate, it's a retail number with a haircut on it, and the haircut is the whole guess. Genuinely asking, because my spreadsheet does exactly that and I've never trusted it.

aaron_fitz10 · Answer

Quote a range and you've told the seller your ceiling. That's the part I'd never get back.

devon_pierce · Answer

I've been building lists for four months and haven't made an offer yet, so take that for what it is. What I notice reading this is that your six condition questions are the actual product. Anyone can pull the same absentee long tenure list. Asking about the sewer before you quote is the part the crowd working the same data isn't doing.

tonyv88 · Answer

On tenant occupied ones you may not get inside for a week anyway, so the range is doing the work whether you like it or not.

carlos_nunez · Answer

I range on every first call and I don't apologize for it. What I changed is that the top of my range assumes the roof, the mechanicals and the sewer are all done, and I say that out loud in the same sentence. "175 if the roof is newer than ten years and the line to the street is clear, 140 if it isn't." Then the walkthrough isn't a correction, it's the answer to a question they already heard me ask. Your 155 to 175 didn't have the condition attached to it, which is why 138 landed as a new offer instead of the low end.

jessreyes12 · Answer

The thing I would have been too embarrassed to ask in person: does a seller actually understand what a sewer lateral is when you ask? I picture asking that on a first call and getting a long silence. @quarry, do you get real answers to those questions, or do you get "I think it's fine" and price it as if they said no?

Offer range before the walkthrough, or no number until I'm inside?

6 replies