What Benefits The Real Estate Agent More? A High or A Low Price?
The answer: Neither.
The answer is neither because it is the wrong question.
It is true that a higher priced property, assuming that it sells at that higher price will typically yield a higher commission for the real estate agent, because commissions are usually a percentage of the sales price. So, it sounds like the agent would prefer the higher price.
It is, also, true, that a higher priced property might sit on the market longer, if it is priced too high, which means that the agent would be getting no commission, which implies that the agent would like to see the price lowered in order to get a sale and, hence, a commission. In fact, usually, the lower the price, the faster the sale, which means that the agent would be getting a commission sooner. So, it sounds like the agent would prefer the lower price.
A better question might be: what benefits the client more, a higher or a lower price?
A real estate agent has a fiduciary responsibility to the client, not to himself or to herself.
Most real estate agents are in the business as a career and, therefore, must take their fiduciary responsibility seriously, if they intend to stay in the business.
So, the key to pricing a property is to not price it high, to not price it low, but to price it correctly.
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