Real Estate Pricing: Who Sets the Price in Real Estate?

iStock_000005979170XSmall“It is REALTORS who make the marketplace and set the prices that Buyers have to pay!”. I have heard this statement time and time again…

Unless your REALTOR is beating you about the head to either sell for a certain price or buy at a certain price, it is the Buyer who decides if he will short, meet or surpass the Seller’s price. REALTORS give you suggested guidelines but it is your money that you spend or receive and it is totally your decision.

The REALTOR is often blamed if you feel that you have overpaid or undersold, but the REALTOR is the middleman who creates a marketing plan and it is up to either the Seller or Buyer to “buy” in to it. If the REALTOR Has done their job properly then the listing price and the selling price will be within a five per cent range.

If the REALTOR has done their proper due diligence, then the asking price will be justified by the sales of surrounding comparables. Sellers however, myself included, have a unique ability to not be able to gage the value of their home as it is a home to them and not a house. Listen to your REALTOR and they should be able to justify their suggested asking price with comparables but remember that at the end of the day, showings and Buyers will infinitely find the price level by the activity and offers on your property.

Today, in a number of cases we are back in the world of Multiple Offers however, if the Seller’s price in unrealistic, even the multiple offers may be below listing price. If they are above the listing price, the Seller has the advantage and the Buyer must be prepared to get in to the “Game”. If the Buyer does not get in to the game and thinks that the next comparable house will be lower, it won’t. Pricing on that house will be based on the price that was just paid for the house they did not offer on. That is why, as the market moves up, many Buyers feel left behind. Don’t be shy, get into the game, and soon it will be your buy that is setting the comparable price for the next sale.

Note: In my many years watching the Real Estate Market there have been blips but no one has ever overpaid in the long run. The market has always looked after itself and while you may have to wait for a blip to recover, you have shelter, a place to raise your family, enjoy your friends and build equity.

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