Who determines the selling price of a home? Is it the Realtor, the seller, or the buyer? Or, is it the market?

Back in 2004-2005 our Bradenton real estate prices were were increasing 30-35% a year. People were actually complaining that Realtors were driving the prices UP.  Fast forward to 2008. Now that our prices have declined 30%, people are complaining that Realtors are driving the prices DOWN.

Does the Realtor Determine the Price?
Some consumers have the idea that it’s the Realtor that determines the price for which a home sells. As a professional Realtor, I know that idea is wrong. Realtor’s consult Sellers when a home is listed and recommend a price that it appears the market will bear. The Seller determines the price he/she wants to ask and the Realtor decides whether or not he/she will take the listing at that price.

Does the Seller Determine the Price?
I often have sellers say, “I’m not going to give my home away. I know it’s worth $350,000 and I won’t sell it for a dime less.” This type of rhetoric would have you believe that it’s the seller that determines the price for which a home sells. Again, as a professional Certified Residential Specialist, I know that idea is wrong. The Seller may WANT that price, but they may not GET it.

Does the Buyer Determine The Price
Buyers have said to me, “That home isn’t worth the $350,000 the seller is asking. I won’t pay a dime over $300,000. The buyer assumes he or she can determine the selling price. Once again, I know that idea is also wrong. The buyer may WANT to buy that home for $350,000, but he/she may not GET it.

So, who sets the selling price of a home? Is it the Realtor, the seller, or the buyer? Arguments could be offered regarding all three. But the truth is it’s the MARKET that sets the price.

What is MARKET VALUE?

Residential Appraisers Institute defines market value as…

“The most probable price which a property should bring a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: (1) buyer and seller are typically motivated: (2) both parties are well informed advised, and each acting in what he considers his own best interest: (3) a reasonable time is allowed for exposure in the open market: (4) payment is made in terms of cash in U. S. dollars or in terms of financial arrangements comparable thereto; and (5) the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions* by anyone associated with the sale.”

Investorwords.com defines market value as…

“The price that an interested but not desperate buyer would be willing to pay and an interested but not desperate seller would be willing to accept on the open market assuming a reasonable period of time for an agreement to arise.”

My job as a Realtor is to help buyers and sellers understand market value by providing competent research of our local market. I am good at what I do, but I don’t control the market, I only interpret it.
Someone once said, “The market may not be kind, but it is never wrong.”

In other words, your home is worth not what I think it is, nor what you think it is, but only what the market says it is.

My Realtor friend, Missy Caulk says this to Sellers when listing their home, “The seller sets the price of the home, but ultimately the buyer determines the value. My job is to supply you with the facts about what has sold recently and what is now for sale to help you make a decision.” That’s good advice.

(Copyright © 2008 By Dan Forbes, All Rights Reserved.)

When I started real estate in 1994 our local MLS book was printed once a month.  The internet was in its infancy with no real estate listings available to consumers.

When you took a new listing it could be a month before other agents in your MLS even knew about it and even longer then for buyers to find out about. 

So, several things happened.

1. Real Estate offices conducted once a week “caravans” so the office agents could see the new listings.
2. Some Boards conducted “caravans” so agents could see the new listings of other offices.
3. Buyers drove around looking for yard signs.
4. Agents held Open Houses to expose their new listing to buyers.

Open Houses as an effective method for finding your next home was somewhat successful.  It made sense to visit Open Houses in 1994.

Fast forward to 2007.  Things have changed:

1. Buyers have access to the MLS through agent websites and have INSTANT access to new listings. Try BradentonFloridaRealEstate.com
2. Agents set up buyers on email plans that INSTANTLY send them new listings as they are entered into the MLS.  Try our VIP HomeFinder Program
3. Buyers can see multiple photos of the home for sale.
4. Buyers can walk through the home virtually using their computer in the comfort of their own home. See BradentonRealEstate.com
5. Agents no longer have to hold Open Houses for buyers to find the home for sale.
6. 1000’s of web sites are available for buyers to find homes for sale.

The most recent NAR (National Association of Realtors) Survey of Home Buyers reveals how buyers first learn about the house they purchse:

• 36 % their agent found the house for them
• 24% the buyer found the house on the internet
• 15% found the house by the yard sign
• 8% through a friend, or neighbor
• 5% print or newspaper ad
• 3% directly from the seller
• 1% homebook or magazine
• <1%  Buyers are no longer finding the house they purchase by attending an open house.

NAR President, Thomas Stevens, says of the survey, “The real estate industry today bears little resemblance to the way we did business 10 years ago. It is hard to find another industry that has adopted technology so readily to its customers.”

If you are still visiting Open Houses, you are using old methods that just don’t work today. 

The BEST way to find a home is to work with a great REALTOR (like me) and to use my web sites. 

Please contact me, Dan Forbes, or call if you have questions about our Bradenton, Florida real estate market at 941-746-0505; toll free 877-646-8326.  Visit my web site BradentonFloridaRealEstate.com 

Forbes magazine just released it’s list of the 10 Most Attractive Real Etate Markets.  They studied 40 of the largest housing markets looking at home sales trends and projects. Forbes believes these markets represent a good buy for home buyers.

These areas have experienced price declines but are expected to see increases in the near future:

Here are Forbes’ and Moody’s 10 most attractive markets, along with the median homes sales price and their price change from 2006.

1. Fort Worth, Texas: $156,500, 1.7 percent
2. Kansas City, Mo.: $157,700, -0.7 percent
3. Houston: $154,900, 1.4 percent
4. Cleveland: $128,700, -7.1 percent
5. Denver: $255,200, none
6. Long Island, N.Y.: $482,300, 1.7 percent
7. Washington, D.C.: $445,300, 0.3 percent
8. Orlando, Fla.: $265,100, -2.4 percent
9. Phoenix: $264,800, -2.7 percent
10. Las Vegas: $307,900, -3.6 percent

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Please give me a call if you have questions about our Bradenton real estate market.  You can reach me, Dan Forbes, at 941-746-0505 or toll free 877-646-8326.  Also visit my web site at BradentonFloridaRealEstate.Com  and my blog at The Real Estate ZOO.

USA Today ran a story on how it’s more difficult for self-employed people to get a home loan today. Many lenders have closed their doors entirely. And many lenders that still offer such loans have tightened their standards, making it harder for self-employed borrowers to qualify.

Here’s what self-employed borrowers need to qualify for a mortgage in this new environment:

More documentation. Along with two years of tax returns, self-employed borrowers might be asked to provide a profit-and-loss statement, bank statements and proof that they’ve been in business for at least two years. A letter from their accountant probably won’t be good enough.

Fewer tax deductions. Self-employed workers who plan to buy a home in the next year or two might want to forgo some deductions. Show as much income as you can.

Larger downpayments. An old-fashioned 20 percent down is very persuasive.

Excellent credit. A credit score of 720 or higher will give a self-employed borrower some choices.

Patience. Even for well-off business owners, qualifying for a mortgage is not that smooth, easy no-brainer like it used to be. If you want it to be quick, you’re paying a higher price.

Source: USA Today, Sandra Block (10/02/2007

When is the best time to buy real estate? When it is a buyer’s market, right? So, what are you waiting for? Our Bradenton real estate market is a ripe opportunity for investing in real estate or buying your dream home.

As I sat down to write this article I thought I’d write about the Top Ten Reasons to Buy Bradenton Real Estate. These thoughts are coming to me as I type:

1. Bradenton has a wonderful, desirable location. Bradenton is located in Manatee County which is between Sarasota and Tampa on Florida’s West coast. The largest city in the county is Bradenton, but the name Bradenton is used for most of the unincorporated area of the county as well. Other cites include Palmetto, Ellenton, Parrish, Bradenton Beach, Holmes Beach, and Anna Maria. Bradenton offers easy access to all of central Florida, including Orlando.

The Manatee River runs through the county and provides easy access to the Gulf of Mexico. Boating, fishing, and water sports are great area attractions. Or maybe, you’d prefer relaxing on some of the best beaches in Florida.

2. Bradenton has a huge supply of inventory, but it seems to have topped out. Excess inventory is what drives prices down, but just as importantly, it gives you plenty of choices. Just two years ago if you could find five homes in your price range, you were lucky. Now you can select from among hundreds of homes. Better selection equals a better purchase.

Now that our inventory is beginning to shrink, it may signal that the bottom has already occurred. Buy now before the seller’s market returns.

3. Bradenton prices are down. Our residential prices are down over 20 percent from the high of 2005. This is unprecedented and represents a great buying opportunity. If you were to tell someone that you could buy real estate at a 20 percent discount, they would call you a genius. Opportunities like this don’t last long.

4. Interest rates are still near historical lows. Ask anyone in the business where interest rates are going to go over the next few years. Everyone believes that rates will go up. For every increase in interest rate, thousands of buyers are shut out of the market. Your dollars will go farther today than they will a year from now. Taking advantage of today’s rates is like buying your house at a discount. Financing guidelines are tightening on a daily basis. This is a sure sign that rate hikes are coming.

5. In Bradenton it is still possible to buy with little to zero down. 100% financing has all but disappeared. However, it is still available for many. Then there are other options like 97% percent, or 95% financing. On top of that, today’s sellers are willing to pay some or all of the buyer’s closing costs. We have seen many buyers get into the home of their dreams with virtually no money out of pocket.

6. The baby boomers are coming to Bradenton. A few short years ago Money magazine named Bradenton, Florida as one of the top five places to retire. Well, it’s an even better area today than it was five years ago. Our proximity to the white, sandy beaches of the Gulf of Mexico is quite attractive, since we are a coastal county. We are also located near two major airports (Tampa and Sarasota). The Interstate highway system provides great access to Manatee, Sarasota, Pinellas, and Hillsborough Counties. As long as it keeps snowing up North the baby boomers will keep coming here. Our area is just a fantastic place to live, work, and play.

7. Bradenton sellers are motivated to sell. Some homes have been on the market for over a year. They have reduced their price again, again, and again. Some are desperate and most are quite motivated. Having practiced real estate for thirteen years in Bradenton, I have never seen sellers so motivated. Now is the time to get a great deal!

8. Bradenton’s foreclosures and short sale market is a once-in-a-lifetime opportunity.
Since many speculators overextended themselves in 2005 our foreclosure and short sale rate has skyrocketed. If you are an investor, this represents a tremendous buying opportunity. Your strategy should be to buy at a discount, hold for a few years, and then sell for a big profit. Put a tenant in the property and allow them to pay down your mortgage for an even greater profit. If you are buying a home to live in, the advantage is even greater.

9. New home builders in Bradenton are offering unprecedented incentives. Buy a new home, get a free pool. Need help with financing? No problem. One builder is offering to hold a 15 %t second mortgage for five years, no interest, no payments. Others are offering $10,000 or more towards closing costs. All of this is on top of the $50,000 to $100,000 price reductions. Your Realtor will know where the best deals are.

10. The Bradenton real estate market is poised for a quick rebound. It is predicted that our market will experience what’s called a “V” recovery. It was quick to go down and it will be quick to recover. If you are the type of buyer waiting to find the bottom you have probably already missed it. Even if you believe the bottom is still to come, buying today locks in your discount during a historical opportunity. Waiting now may only mean paying more in the future.

Well, there you have it. Here are my thoughts on the Top Ten Reasons to Buy Bradenton Real Estate. Actually, it was quite easy to come up with these ten reasons. There are probably ten more I could have written about.