Who Controls Price?

Written by Gary Pittard Thursday, 31 March 2011

Agents are not responsible for market prices. A good agent however, acting in the best interest of their vendor, should be in control of their vendor’s price.

Too many vendors and agents think that “selling” a property means finding a buyer. That’s nonsense. Finding a buyer is only the first stage. The second stage, which few agents do properly, is getting the buyers to pay their highest price.

Only incompetent agents say a property is “worth what a buyer pays”. The good agents, the true negotiators, know:

A property is worth what they can persuade the buyer to pay. These agents are in control. Whatever the buyer can pay is what the good negotiator gets for the owner, not what the buyer wants to pay.

Buyers want to pay less than their maximum. With most agents, this is exactly what buyers do. Ask any homeowner what price they paid for their home. And then ask what price they would have paid. Most will admit they would have paid more. When asked why they didn’t, most will say the owner agreed to their offer and the agent did not ask for more. This applies whether property is sold by auction or private sale. Most real estate is sold for less than it could have been sold for.

Agents who are not skilled negotiators are underselling owners.

The reason is simple: the focus is on the seller’s minimum (with auctions, the seller’s minimum is the reserve). The focus should be on the buyer’s maximum. The difference can mean thousands of dollars to a seller. When an agent gets the buyers’ maximum, the agent has earned a selling fee. The highest possible price has been achieved. The agent, not the buyer, has controlled the sale price.

Comments (0)

Subscribe to this comment's feed

Name

Email

Comment

smaller | bigger

Subscribe to thread.
(Registered users only. You will get an email every time a comment is made to this article)

Write the displayed characters

Add Comment