Who Has the Power?
By Jim Palmer Jr.

It is interesting to watch the ebb and flow of real estate cycles through the years as well as watching the tug-of-war between buyers and sellers. We often talk about whether it is a buyer’s market or a seller’s market and try to determine which it is. The impression is that during a buyer’s market the buyers seem to have more power and during a seller’s market the reverse is likely. Lenders seem to play an important role in the power game as well, since they control the money, so most buyers have to play by their rules.

Even though a buyer’s market seems to create an atmosphere where the buyers have more leverage, I believe that it is sellers who have the most power in a transaction. After all, they can simply ignore or reject any offer even if it is above the offering price. In one example a seller alerted the listing agent that they had been having problems with a neighbor who had bullied them. That adjoining neighbor stood to gain the advantage of controlling and protecting their good view if they purchased this property. The seller let everyone know in advance that they would never accept an offer from that neighborhood bully. The seller was well within his rights unless they were refusing the neighbor’s offer because of racial or other prejudice, which is against the law.

When a seller receives an offer they have several choices, accept the offer, counter the terms of the offer, reject the offer or ignore the offer by not responding. When multiple offers come in at the same time or in differing time increments, the seller is not obligated to take them in the order they came, nor are they obligated to deal with one first, making the others wait. The seller is free to do what they want and has the power to accept, reject or counter the offers in any way they wish. They can decide not to sell, or decide to raise the price significantly. In other words, they really have the power since they control the real estate.

Of course that power may dwindle depending on the forces at work to motivate them to sell. Buyers often mistakenly think that they are in the driver’s seat when the market takes a dip. That would only be true if the seller can’t wait.