Price Range
Definition and meaning of Price Range in real estate.
A price range is the spectrum of cost, from a minimum to a maximum amount, that a buyer is willing and financially able to pay for a home.
In more detail
Establishing a price range helps buyers and their real estate agents narrow down property searches to homes that fit their budget. The lower limit is often set by what the buyer feels comfortable spending, while the upper limit is typically determined by their mortgage pre-approval amount.
Shopping within a realistic price range prevents buyers from falling in love with properties they cannot afford and ensures they have enough funds left for closing costs and moving expenses. Agents use the price range to filter online listings and identify neighborhoods that offer the best value.
Key facts
| Category | Buying & Selling |
|---|---|
| Determined by | Mortgage pre-approval, household budget, and down payment savings |
| Used for | Filtering MLS listings and home search criteria |
| Watch out for | Exceeding the top of your price range in bidding wars |
A couple looking for a townhome tells their agent their price range is between three hundred thousand and three hundred fifty thousand dollars based on their pre-approval letter.
Frequently asked questions
Should I look at homes at the very top of my price range?
It is usually wiser to search slightly below the top of your range to allow room for bidding wars, closing costs, and unexpected repairs.
Can I change my price range during the home search?
Yes, you can adjust your price range if your financial situation changes, such as if you save a larger down payment or if interest rates drop.