I was recently on a listing appointment where we were discussing how to properly price the home compared to other similar homes on the  market.  I made the remark that neither you, the seller, nor I, the Realtor, determine the price of the house.  The seller gave me a puzzled look wondering how I came to that conclusion.

We are in a slow real estate market where there is a lot of inventory.  Unfortunately for you and I, the buyer actually determines the price.  As a seller, you have “veto power”, meaning if you get an offer that you do not like, you have the ability to veto it or make a counteroffer.  In a slow market, it is the buyer who determines what your house will sell for.  They will analyze the amount of inventory available and they will make a decision based on the competition and offer you as the seller a certain amount for your house.  You can either say yes, no or maybe, but they do hold the cards.  In a fast market market with very little inventory, it is the seller who determines the price.

It is all about supply and demand.  Any commodity where there is an overabundance the price goes down and when there is a shortage of inventory, the price goes up – real estate is no different in this instance. 

We may like the fact that in a slow market that we do not control the price, but that is just the way it is.