'Price cutting hurts all homes'
Inman Community brief
By Inman News, Thursday, October 16, 2008.Editor's note: The following is a comment on the Oct. 6 Inman News story, "Coldwell Banker promotes price reductions."
"This is more like a race to the bottom ... price cutting just gets more price cutting. This sounds more like a revenue hunt on the part of Coldwell Banker. While many homes are indeed overpriced, price cutting hurts all other homes on the market.
"While many believe we have just a supply problem, we may also have a 'demand' problem. It is now more difficult for borrowers, especially with "jumbo" financing needs or for those that need larger down payments.
"The way out of this problem is much more complex than just a 10 percent off fire sale." --Vince Ciroli
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Submitted by RN on October 16, 2008 - 9:41am.
I disagree. The solution is simple. Cut prices until buyers can afford the homes. I tell everyone of my clients that with this kind of inventory we have to lead on price and they sell. We have had artificial appreciation for years now as the bubble deflates it is painful, but necessary.
Submitted by Jim Lee, Portsmouth New Hampshire Realtor on October 16, 2008 - 9:49am.
No buyer at any price, no sale.
http://en.wikipedia.org/wiki/Fair_market_value
"A fair market value is often an estimate of what a willing buyer would pay to a willing seller, both in a free market, for an asset or any piece of property. If such a transaction actually occurs, then the actual transaction price is usually the fair market value."
If no one is buying at the current price then that doesn't seem to be the current fair market value.
One Coldwell Banker office said: "According to Coldwell Banker, 56 percent of agents polled said that listing prices in their markets were above where they need to be to attract qualified buyers, and that most sellers in their markets had "unrealistic expectations" for the initial listing prices for their homes." and I agree with them.
I've represented mostly buyers this year because who needs a listing with an unrealistic seller giving you grief because the market won't support what he or she thinks their price should be.
If you want to sell today (or most any other time) your house is worth what a buyer is willing to pay for it whether it's 10% less, 50% less, or nothing less than asking price.
No buyer, no sale.
Jim Lee, CRS, ABR, GRI, NAR Certified e-PRO Trainer
Realty Executives Associates, Knoxville, Tennessee
www.KnoxvilleHomeCenter.com mailto:Jim@JimLee.com
(865) 693-3232, My Personal Toll Free # 1-800-662-2488 ext. 163
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Submitted by Matt Eisenhauer on October 16, 2008 - 11:05am.
I agree with the responses above. It is simple market economics. If you want to sell, you have to meet the price that buyers are willing to pay. Most sellers who've been in their houses for more than 3 years, and have some equity built up, can still sell and walk away with some money. I've been working with a lot of sellers this year - the ones who are realistic have been able to sell, the others are sitting.
Matt E.
Submitted by Brenda Goodell on October 16, 2008 - 11:47am.
This is a hard time for everyone. The economy is unstable so making big investments is scary for people. Cutting prices of homes should help people ease into buying a house, not cutting prices helps no-one.
Celina Real Estate
Submitted by Suzi Enders on October 16, 2008 - 2:36pm.
I agree it is more complex than cutting home prices. Why would any sane agent race to the bottom?
Suzi Enders, Paradise, CA. 95954
(530) 873-6146
www.ParadiseRealEstate.us
suzi_enders@yahoo.com
Submitted by John Rakoci on October 16, 2008 - 3:16pm.
Maybe it is Caldwell-Banker that needs to generate revenue. I have turned down listings that were not being realistically priced and happy that someone else took them as they help sell homes priced correctly. We are in a cycle correction, one that was expected for years. Prices in my neighborhood are going UP and it is not the only neighborhood in the country doing so. Not all homes on the market are over priced. It is much tougher to get loans today as the pendulum swung from too easy to too difficult. The stock market is volatile as it prices the possibility of a dem president, remember it looks forward six months. The media loves bad news and bad news gathers more bad news (and dem votes). This cycle too shall pass and current buyers will be happy as current sellers shall not be. Remember, years ago McCain and others wanted to put more controls on Fannie & Freddie and Clinton gave banks less control. Obama thinks Fannie & Freddie were correct enough to have former execs as advisors. The blame for todays situation is widespread but it is going to take work and time to move forward more than lowering prices.
Submitted by Bill Fooks on October 17, 2008 - 3:07am.
Bill Fooks
TFT realty Marketing Service
Warwick, RI Fooksteam.com
Price is one part of the equation. Motivation is another part. No matter how much a seller wants to sell, if they don't need to sell they won't sell.
Speculators need to sell, but don't want to loose. In this market they will do both. Sell and loose.
Home owners who don't have to sell and have a great place to live, should stay put. They will eventually have the mortgage payed off.
People who MUST sell will need our help in this market. This is how we earn an above average commission for our expertise. This is not always price, not always bank financing, not always the normal way of doing things.
We have the other side, of buyers who must buy. We as good sales people will encourage this side of the equation.This is not always price. It could be location, it could be special financing, not "give aways", like free appraisels. It could be tax advantages, it could be drive time, energy savings in new and better homes. It could be that in a number of years they won't have to pay a mortgage or rent anymore.
We have to stop complaining and look at what we have out there.
Coldwells price reduction might do all of this and then it is up to the sales people to put it to use.
Let the market speak and let the sales people sell. Stop complaining! Do something!!! SELL
Submitted by Walter Boomsma on October 17, 2008 - 3:17am.
What's interesting about most of the comments is underneath them is a "let the market work" belief that's refreshing, partly because it's so different in the current political and economic environment.
The free market system works if we leave it alone.
We are wound up over housing, but we have basically the same problem with health care.
And if you'd like some advance notice of the next crisis it's education and student loans. I listened to a guy whine that his daughter was having trouble getting a loan for her senior year of college because (are you ready for this?) his wife made too much money! That's right, I said TOO MUCH.