Agents and Home Pricing Myth Dispelled

In much of the country we’ve been in an ongoing seller’s market, where home prices have been on a steady rise, often selling very quickly and garnering multiple offers. For buyers this can be frustrating as they try to reconcile factors driving the market. A common misconception is that agents drive the market upward:

If anything, the opposite is true and this is easily demonstrated. The commission on four $250,000 houses is roughly the same as the commission on a $1,000,000 property. Are there more qualified million dollar buyers or more $250,000 buyers? There are a lot more buyers qualified at $250,000 obviously. What this means is that as agents, we are in a better position to serve buyers when there is sufficient inventory at affordable prices than for there to be a scarcity of homes with few buyers.

Sellers set the price. As agents we provide education and information that inform sellers of market conditions and comparable properties. It’s their decision where they choose to price their home and at what price they choose to accept an offer. Real estate is a market, just like the price for everything from used cars to stocks to commodities, where agents work within the market to assist buyers and sellers, but it is supply and demand that drive prices.