Hi folks. How many of you have heard "REALTORS® are the reason prices skyrocketed so high during the boom"? I know I have. Especially from the "bubble heads". They feel that we were out there setting prices higher and higher because the Buyers would pay it. There is some truth to that but the price was dictated by the market, not REALTORS®.
I can remember, in 2005, going back and forth with Sellers on where to price their house. They would want to price $20,000 higher than the last sale and as hard as I tried, I couldn't talk them out of it, so we listed it. It would sell in a matter of days at their price!!! Then the appraisal would come in too low and the Buyer would agree to pay the difference.
The market was pulling values up with me kicking and screaming!! So I did what any good REALTOR® would do……I listed and sold a lot of houses.
Now we have the opposite problem. I'm closing on a property tomorrow that sold for $150,000 with the Seller paying 6% towards buyer's closing costs AND paying 3% into the Nehemiah program. That's $14,000 in concessions which makes the effective sales price $136,000. The property appraised for $187,000!!!
I placed another one of my listings under contract yesterday at $179,000. This property is only 3 years old and is tax assessed at $225,000. My comps came in at $230,000. The Seller needing to sell badly suggested pricing it at $169,000!! After going back and forth with him for a few days we agreed to Range Price it $179,000 to $189,000. It went under contract with multiple offers in 21 days.
I have another listing that is going to require a short sale. The owner paid $270,000 brand new last year. It's on the market at $139,000!!!
All three of these homes were priced lower than I had suggested. In all three cases the Sellers need to sell and don't have time to test the market.
The market is pulling values down with me kicking and screaming! So I did what any good REALTOR® would do……I listed them and sold them.
The point of this post is to show that we have no control over property values. They are controlled by the market. When properties were scarce Buyers were willing to pay just about anything to get a home. When properties are abundant, Sellers needing desperately to sell, will price as low as they can to get their house sold. And there is nothing REALTORS® can do about it.
Next year, this is what we will be hearing, "REALTORS® are the reason prices dropped so drastically during the crash". So what's a REALTOR® to do?
Copyright © 2007 Broker Bryant Real Estate Ramblings | All Rights Reserved