Direct link to Big Bear Real Estate – Who Controls Real Estate Pricing?
In short, the buyers.
Real Estate agents like to think they have some effect on the pricing, but I believe it is determined mostly by the buyers, and to some degree, sellers. It doesn’t matter how great an agent thinks they are, our how much money they spend marketing the property, if the price is too high and the buyers don’t agree with it, it won’t sell. No amount of skill or marketing will force a buyer to pay a significant amount more than what a property is truly worth.
Now, you definitely want an agent who knows how to market and position a property, but that is all secondary to the asking price. Finding a listing agent that knows how to price accordingly in this market should be your #1 concern.
Related posts –
Where are the Big Bear Real Estate Buyers?
Low Appraisals – The Kiss of Death for Your Big Bear Real Estate Transaction.
Actually I think agents have a reputation for pushing prices downward in order to get a quick sale for the least amount of work. Everyone I know thinks that. I have yet to meet anyone whose agent asked a higher price than anyone thought a house was worth because that agent thought he or she was so “skilled.”
Thanks for the comment.
That is one of the typical stereotypes for real estate agents. I’ve also heard the opposite, that agents jack up the prices so they can get more commission. Guess it depends on who you ask, a buyer or a seller?
In my opinion, few agents truly have the skill to properly price homes. It’s definitely not an exact science, more of a gut feel based on working in the market everyday and looking at a lot of properties. I’ve been on the higher end of the pricing spectrum many times and still sold it fast. It’s not a matter of how much work it will take, it’s a matter of what the property is worth, what a buyer is going to spend on it. There’s value in an agent who understands that.
You don’t really truly know the value until it is marketed and exposed. Until then, it’s just an opinion.
There are several things I know for sure. First, in this market, the longer a home sits on the market, the less it will sell for. I don’t think that is really debatable. Second, it is highly unlikely for a properly exposed property to sell under market in today’s information age. Here’s a good example – https://www.redfin.com/CA/Big-Bear-Lake/39408-Point-Rd-92315/home/3058507 This one came on the market at $450,000, had over 5 offers within 24 hrs, and sold for $676,000.
I see tons of sellers deciding to list their home with agents who tell them they can sell the home for a much higher price. “Skilled,” or not telling the truth, sellers make decisions based on that. And that’s why a lot of homes sit.
The agents who sell a lot of homes understand that buyers are driving this market, and the buyers decide which properties sell or not.
Hi. Re your comment “I’ve also heard the opposite, that agents jack up the prices so they can get more commission. Guess it depends on who you ask, a buyer or a seller? ”
This isn’t really the case; at least not in this market. It might have been in 2006 when it was possible to do this, but not now. The main reason being, you obviously can’t “jack up” the price past what it will appraise for, so essentially there is a limit to how much an agent can do that. But there is NO limit to how much you can take the price down.
I think this translates to the reputation being that agents doing whatever is most expedient to *them,* and not so much to the buyer or seller other than some kind of accidental benefit.
I disagree Fred.
Not sure if you are a real agent, but as one who works full time in this business, I see it all the time. Obviously, it can happen more with limited inventory (which is what we are seeing now, down 30-40% from last year), but some agents take overpriced listings in order to put their sign on it, get sign calls and buyer leads, and then work the seller down on the price or wait for their motivation to change as it lags on the market.
Appraisals are opinions as well, not fact. Two different appraisers can differ on the value, just like agents. Also, there’s nothing that says a buyer won’t pay over appraisal value either. If it’s unique and there are no comps, it happens. 37% of the sales in Big Bear are cash, no appraisal.
Yes, there is a limit on how low you can take the price down. It is called the information age. That, along with competition from other agents won’t allow you to undersell a home these days, at least in 99% of the cases. Once a property hits the MLS, the world knows about it. Case in point, as I mentioned it before, the lakefront at $450,000 listing, sold for $675,000. The market didn’t let it go for less than it was truly worth. If something comes out too low, it will get multiple offers.
The longer a home sits on the market, the less it will get.
If we continue to see the inventory drop, then this could switch a bit as it did from 2001-2006. The market caught up to overpriced homes as they lagged on the market. From then up until now, that was not the case. It may start to happen again, stay tuned.