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.)

“We are going to see the collapse of the condo market, both in Manatee and Sarasota counties (Florida),”

said Hank Fishkind.  Hank is a Florida economist and his opinion is quite sought after.  Once a year he speaks to our local Chamber of Commerce, but this meeting was a Lakewood Ranch last Friday to a gathering of about 300 people.

Fishkind expects very slow growth in 2008.  Perhaps 1 to 2 percent at best. Yet, he predicted that our area has reached the bottom in terms of depreciating home prices and surplus inventory.  He expects the climb upward to begin soon.

Manatee and Sarasota counties are in favorable positions because of two nearby airports.  Namely, Tampa International and Sarasota - Bradenton International.  Also, the I-75 corridor runs down through both counties. And, then there’s the sunshine and the gulf beaches.

Manatee County was actually the second best Metro-market for all of Florida in December, as far as number of home sales.  We are seeing the surplus of inventory dropping and home prices stabilizing.  It does appear to be a great buying opportunity.

Want to know more about our Bradenton Florida real estate market?  Please pick up the phone and give me a call.

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

Good news!Our local home sales are on the way up.

For the month of July we were THIRD among the state’s 20 metro markets.

Inventory is down for the third straight month. I am quoted in an article by the Bradenton Herald today, ” ‘That really is the first sign that we are bottoming out, when the inventory evens out,’ said Dan Forbes, co-owner and broker of Premier Team Inc. in Bradenton.”

Read the article here.
===============

I’m Dan Forbes and I want to be your Realtor and resource for all your Bradenton real estate needs.

The value of midsize and large homes declined more in the last year than the value of small single-family residences, according to a second-quarter analysis by real estate Web site Zillow.com.

The value of single-family homes smaller than 1,200 square feet fell by just 1 percent, according to Zillow’s report. Meanwhile, values of midsize homes between 1,200 and 1,900 square feet fell an average of 3.1 percent, and homes larger than 1,900 square feet declined 2.8 percent.

Zillow.com also offers a comparison of 66 metropolitan statistical areas on Zillow.com.

These findings are culled from that analysis:

The highest-appreciating metropolitan areas (year-over-year):
• Grand Junction, Colo. (18.6 percent)
• Corvallis, Ore. (11.2 percent)
• Charlotte-Gastonia-Rock Hill, NC-SC (9.0 percent)
• Eugene-Springfield, Ore. (6.9 percent)
• Spokane, Wash. (6.1 percent)
• Seattle-Tacoma-Bremerton, Wash. (5.3 percent)

Most-depreciating metropolitan areas (year-over-year):
• Sarasota-Bradenton, Fla. (-16.4 percent)
• Melbourne-Titusville-Palm Bay, Fla. (-14.3 percent)
• Stockton-Lodi, Calif. (-13.5 percent)
• Charleston-North Charleston, SC (-12.8 percent)
• Daytona Beach, Fla. (-12.5 percent)
• Modesto, Calif. (-12.4 percent)

Most expensive metropolitan areas:
• San Francisco-Oakland-San Jose, Calif. ($685,653)
• Honolulu, Hawaii ($632,270)
• San Luis Obispo-Atascadero-Paso Robles, Calif. ($537,722)
• Los Angeles-Riverside-Orange County, Calif. ($525,175)
• San Diego, Calif. ($505,334)
• New York-Northern New Jersey-Long Island ($445,435)

Least expensive metropolitan areas:
• Jackson, Tenn. ($91,563)
• Greenville-Spartanburg-Anderson, SC ($101,178)
• Tulsa, Okla. ($102,876)
• Dayton-Springfield, Ohio ($108,121)
• Rockford, Ill. ($116,475)
• Columbia, SC ($116,865)

Source: Zillow