Tips & Trends for the Flagstaff Real Estate Market:
Past Articles [June 2006]
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Who Sets the Price of a Home?
Some people have a misconception of how a home is valued and who sets the final price on a piece of real estate. I am told occasionally that Realtors® and contractors are responsible for today’s prices, and that it is in our power to bring the cost of real estate down... since we drove the prices up to where they are today!
While I cannot speak for developers or contractors, I can say emphatically that Realtors® do not set the price on the homes that they are marketing. We provide a comparative market analysis to home sellers, which gives them a range of what comparable properties have sold for in their neighborhood. Using this information, the seller must decide what the asking price of their home will be. Most of the time a seller will decide on an asking price at the top end of the comparables or perhaps even higher. They have the final say on how much they want to sell their home for.
Most members of our Northern Arizona Multiple Listing Service (MLS) request feedback from our fellow Realtors® when they show a property that we have listed. One question that is always asked is “Is this property listed at market value?” The feedback is then shared with the home owner.
Currently times are changing. The number of homes for sale in our MLS Service has increased dramatically in the past few months and the length of time on the market before a property is sold in increasing as well. These facts bodes well for buyers and causes sellers to think much harder about overpricing their home in hopes that someone unfamiliar with our market will come along and offer them more than it is worth. The market always comes back to “supply and demand,” and those forces are what are responsible for prices at any given time.
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