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.)

A local real estate company in our Bradenton, Florida real estate market recently ran a special Open House promotion. They enlisted 100 listing clients to agree to lower their asking price by 10 percent for a BIG one day Open House event. 

They ran huge newspaper ads promoting the Red Tag Open House event. Every listing was featured in the paper as offering a special, one day only, 10 percent discount. Our market was abuzz with the hype!

The event was held, and the results are in. 

Ta, Da…..

Visitors: 250 visitors attended the 100 Open Houses.
That’s an average of 2.5 visitors per Open House.  Those of you who hold Open Houses know that usually it’s the neighbors who always show up. I don’t think 2.5 visitors is quite what I call a success.

Sales: Zero, zip, nada, not a one.
I can’t think of a better demonstration of the uselessness of Open Houses.  In my opinion, the buyers have spoken loud and clear, “We don’t need no stinkin’ open houses.” Nail driven. Coffin closed. Let’s move on.

(Copyright © 2007 By Dan Forbes, All Rights Reserved.)

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

Your home isn’t selling but you don’t know why? There’s a nagging feeling that it may be the price.  Pay attention to that feeling, it’s probably right.

Our Bradenton, Florida market has suffered the biggest decline in home prices than any metro-market in the United States. We have lost over 16% of value in the last twelve months.  For the whole year, last year, we lost 18% in value. 

If you home is on the market and not selling, what can you do to make it sell?  Maybe nothing or maybe a lot of things. Nine times out of ten the problem is the price.

Selling your home is an emotional experience and choosing your asking price is crucial.  Ask too little and you’ll leave a lot of money on the table.  Ask too much and buyers will not be interested. The trick is finding just the right price; one that attracts the interest of buyers and put the most money in your pocket.

How many times have I heard a seller say, “I’m not going to give it away,” when talking about pricing their home for sale. This statement is usually accompanied by a lot of emotion.

Of course you don’t want to give your home away.  That’s a given.  Also, if you do decide to give it away, please give me a call first.  I am currently accepting free homes.

Here’s the question: If you home is on the market, and it’s not selling, do you need to drop the price?  Here are the signs that a price reduction may be in order.

Do You Need to Drop Your Price?

1. If you are getting no showings, you may need to drop your price.  I tell listing clients that if the home isn’t being shown it means that even agents aren’t excited about the property.  They don’t think they can sell it and won’t even bother showing it to their buyers. A five to ten percent price reduction may be needed.

2. If buyers are not calling your Realtor asking to see the home, you may need to drop your price.  If a home is listed in the Multiple Listing Service, advertised on the internet, and has a sign in the yard, buyers know about that home. If buyers know your home is for sale and they still aren’t asking to see it, it means they aren’t interested, at least not at your price. A five to ten percent price reduction may be needed.

3. If you are getting a few showings but no offers, you may need to drop your price. Buyer will not even make an offer on what they consider an overpriced home.  They will simply move on to other homes for sale. 

How many showings is enough?  Generally I believe you should have an offer in ten to twelve showings. If you have no offers you may need a three to five percent price reduction.

4. If you are getting a lot of showings but no offers, you may need to drop your price. It’s exciting to get a lot of showings, but disappointing if no offers materialize.  What does it mean?  It means that buyers are interested in seeing your home, but they are still finding better bargains out there.  Your home is actually helping sell your competition.  A three to five percent price reduction is needed.

There there other factors to consider besides price? Sure, there is location, condition, marketing, and financing.  But remember, 80 to 90 percent of getting your home sold is price. Nothing matters as much as price.  Price it right and watch it sell.

Copyright © 2007 By Dan Forbes, All Rights Reserved.

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Please give me a call if you have questions abour 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  

If you or someone you know is facing foreclosure we can help. Lenders are ready to accept short sales rather than taking a home back in foreclosure.

A short sale occurs when a lender is willing to accept less than what is actually owed on the mortgage. Why would they do this? A 2002 study revealed that the average foreclosure costs a lender over $58,000. They would rather accept a short-pay on the mortgage.

Put our experience to work for you and save your credit! Call today.

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

Quite often when being interview by a seller, we are asked….“What about open houses??? Do you do them??” Our answer to most people is…While we are willing to do open houses they are not as effective as most people think.

Statistic show that 1 out of every 100 people that come thru an open house actually buy the house that is being held open. Even with internet advertising and newspaper adds, most people find open houses by following the signs in the neighborhood. Sometimes it is nosy neighbors or people just looking for decorating ideas.

Therefore, when walking into an open house, the public knows nothing about the house. They don’t know the price, taxes or amenities therefore creating a lot of unnecessary traffic thru ones home.

This is usually a great opportunity for a REALTOR to find some buyers to work with. Most people that visit open house and are really considering moving are not loyal to a REALTOR, giving the agent that is holding the open house an opportunity to provide their services to that buyer.

On the other hand, because statistics show that 1 out of every 100 people that come thru an open house actually buy the house that is being open, you do have a remote chance of selling your home through a open house.

If you have 6 people come through an open house on a given weekend, you will have to have about 17 open houses to get 100 people thru. That is 17 weekends that you, the seller, have to be gone for 3 to 4 hours so that your agent can host the open house. Since most people work and use their weekends to catch up on household chores, hosting so many open houses becomes very inconvenient to the seller.

Now the questions is…Is the person who is going to buy your house the 1st person thru, the 50th person thru or the 96th person thru?

When looking to hire a real estate agent to market and sell your home, you want someone who knows what it takes to get the results. The results are just not there with open houses. Hire a REALTOR with an aggressive marketing plan that is going to get you ALL the exposure that you can possibly get. The more people that know about your home, the more likely you are to sell quicker and for a good price.

Let’s face it….if the results were that great, there would be no room on the street corners with all the open house signs.

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I’m Dan Forbes and I want to be your Realtor and resource for all your Bradenton Real Estate needs. Visit me at BradentonRealEstate.com

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