One of the saying from the "gold-rush"
days--"Them that's got the gold, sets the price!"--is also a principle
that applies to real estate. We say that a house is only worth what someone will
pay for it, even though the owner, the bank, and the agent all have their own
opinions about the "market value" of a home. In other words, no sale
ever takes place until the buyer agrees with the price.
How can sellers arrive at the maximum "fair" price that buyers
are willing to pay? Buyers (and appraisers) make their decision based on
comparisons. While shopping for a home, buyers will visit many similar homes in
their price range and measure the features of each one against the price. They
decide which house offers them the maximum value for the price. Buyers do not
expect a home to be a "steal" or dramatically under-priced, but they
do expect it to be a fair value.
Sellers must determine the value that their home offers in order to
arrive at the right price. The Realtor will advise the sellers what buyers
should be willing to pay for their home, but the asking price is set by the
seller.
