5 pictures of the same bathroom taken with three different cameras and 5 different focal lengths:


• Canon G9 Point and shoot camera with 12.1 megapixels  (35mm focal length).

• Nokia Lumia 900 smartphone with an 8 megapixel camera and Carl Zeiss Optics  (28mm focal length).

• Canon DSLR with three different lenses, 18 megapixel with  varying focal lengths depending on the lens:


1) 18mm lens Wide Angle
2) 10mm lens Ultra Wide Angle
3)  8mm Fisheye 180 degree view


Note:  A higher focal length captures less of a room and a lower focal length captures more of a room/property. For example:

- 200mm = Telephoto
- 10mm = Ultra Wide Angle
- 8mm = Fisheye
Canon G9 35mm
Nokia Lumia 28mm
Canon DSLR 18-135mm lens
The Canon G9 is  considered a "prosumer" digital camera that is highly adjustable, but still has the ability to be a simple point and shoot camera. In terms of quality it is generally speaking a step above the average point and shoot camera you pick from your local store or that most agents use. However, in terms of focal length, meaning for our purposes field of view, it  captures a very small amount of information.
The Nokia Lumia 900 with Carl Zeiss optics is a smartphone with built in camera that has a relatively wide angle lens for a camera phone and generally speaking better quality than most phones. However, the reason I selected this device for comparison is because many agents use their i-phones to photograph properties, which in terms of field of view will look like the 35mm G9 picture due to their comparable focal length (29mm - 35mm for newer models). At 28mm notice how much information is captured.
This picture was taken using a DSLR camera with an 18mm lens. Notice how the shorter focal length captures significantly more information, meaning more of the room is captured. This bathroom is a relatively difficult to capture even with a wide angles lens.
The Cameras/Lens
Canon DSLR 10mm lens
Canon DSLR 8mm fisheye lens
This picture was taken from the same DSLR, but with a 10mm ultra wide angle lens. Notice that you almost capture the entire sink and shower in a single image. Keep in mind that this bathroom is relatively small and I am standing in the doorway to avoid capturing the door frame. 
I am using the same DSLR camera as the 2 previous pictures, but this time with a fisheye lens that captures approximately 180 degrees of the room. Notice that you capture the entire sink, shower and there at least 3 new elements that have been introduced into the picture (toilet, towel rack, and cabinet). Picture was corrected for distortion as well.
A Quick Guide to Focal Length
A comparison of the same room captured with 3 different cameras with 5 different focal lengths, you be the judge (quality is not the focus).
Summary
Some people feel that ultra wide angle lenses make rooms seem too large, but it's really about perspective and considering all elements in the photograph then scaling it in your mind (when you look at a globe, you don't assume the world/planet is that small). In addition ultra wide angle lenses are the standard in real estate and architecture photography. More importantly it is crucial to capture as much of the room as possible than it is to make the room seem less large (fisheye being the extreme, where too much distortion outweighs the benefit of capturing the entire room). What matters to buyers is the overall feel of the room and layout. Great photographs lead buyers to the property, the rest is up to the seller and/or agent.
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