As an Honours Economics graduate, I never in my wildest dreams thought I would end up as a Realtor. But even I must admit, this job has given me more hands-on experience with economic theory than I could have ever dreamed of. It's not so much the basic economics of buying and selling, but how people react to things such as prices, incentives, and cooperation.
Mike + Kaley
For example, in university we studied a lot of theory on pricing and how it affects our decisions. Theory is great, but it is incredible how different it is in the real world, where humans are admittedly not as stone-cold rational as a that economics math equation.
Whenever I go to a listing appointment, the first thing the potential seller wants to know from me is the price I think their property will sell for. If I was an investment banker or stock trader, I could tell them right away what the price will sell for. That's because, in stocks, you are dealing with a large quantity of the exact same product. One person's share of Apple stock is no different that another person's.
In the housing market, however, it's a little bit different. It is a mix of the hard facts (square footage, bedrooms, bathrooms, past sales) and the intangibles (view, area, personal connection, light). Every single buyer that goes through your home has a price they are willing to pay for it. If they don't really like your house, they would pay way less than asking. If they absolutely fall in love with your house, they will sometimes pay more than asking.
What makes this so fascinating is that, although the buyer decides the price, the seller is absolutely fixated on the price I can estimate for them, as if I am unilaterally giving or taking money away from them right then and there. Some sellers even choose their agent based on who gave them the highest estimate, as if us Realtors just arbitrarily decide how much your house is worth and that's the price it sells for.
Remember, there are three things that sell your property: your property itself, the marketing, and the price.
The seller has control over the property and the price. The Realtor handles the marketing.
There are many benefits to having a Realtor help you. Knowledge, expertise, and experience play a huge role in choosing your Realtor, and part of that involves advice on how to price your home. But Realtors do not determine price. Buyers do. Realtors market your house (in many different ways, depending on the agent) to try and give you the best possible chance to sell at the highest possible price. That's our job, and our legal obligation to you.
When researching the best agent to sell your property, remember that an agent is there to market your property, not decide how much money is in your pocket. In the end, that is always your decision.
Want to talk more about how we can help you market your property? Give us a call or send us an email any time.
Until next time.
Mike + Kaley