Every now and then I read an article about how real estate agents are setting housing prices so that they can make more money.
Over the last twenty years of working with hundreds of homeowners, I can say for sure that real estate agents do not set or determine home values or prices. Homeowners often have a price in mind but they don’t control prices either.
If the price they have in mind is too high the house stays on the market for a long time and they often end up selling for less than the market value. Buyers are suspicious of houses that have been on the market for more than a month or so.
Home values and prices are market-driven and anyone who is borrowing money to pay for a home will find that their lender will have the property appraised because they too are stakeholders.
Prices are driven by supply and demand. Banks make more money when interest rates are higher but they don’t have control over the rates.
A real estate agent is going to get paid about $250 dollars more for every 10K that is paid for a house. Houses that are well-priced sell faster. Most agents would rather have a quick sale because the longer a house is on the market the more expensive it is for the agent.
Agents don’t get paid anything until after the sale closes.
Real estate agents make more money selling higher-priced houses. Often it is the lowest-priced houses that require the most work.
Do real estate agents make houses more expensive? That is hard to say because agents have it both ways. They let the homeowner know that by using the service of a real estate agent they will get more money for their house.
At the same time, agents tell home buyers that they will save money by working with a real estate agent.