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Retail Banker LO's Income Under Fire - 05.24.10 Video Marketing and Mortgage News Designed for Mortgage and Real Estate Sales

These guys are a great way to start the day. They're a good resource for what's happening in the real estate industry.

They always have some information for the Realtors, Loan Officers, Appraisers and the buying public about what's going on today.

WHO SETS THE VALUES??

So who really sets the value of a piece of real estate?

Is it the buyer with a mortgage pre-approval letter, negotiating with an informed seller?

Is it the Realtor who performs the CMA for a seller?

Is it the Buyer Agent, guiding their buyer?

Is it the appraiser, who gives an opinion of value, regardless of the purchase agreement?

Is it the Bank's underwriters, who review the PA, the Appraisal, the buyer's financials?

I'd contend that any one of these people may have a hand in determining what the value of a certain parcel in a transaction is.

But, looking at value from another angle, let's consider the cash rich investor who has no pressure to buy for shelter. One who is investing his own money. One who doesn't need the permission of a bank to leverage his 5 -10% against the lender's money. This guy weighs the pros and cons of each property, calculating the return on investment. This is where the true value of real estate comes from.

An appraiser shows the bank an opinion of value based on history. Buyers and sellers get upset because values are growing again, and their deal is being "killed" by a review of deals in a crummy market.

Give me an informed cash buyer any day. They are the one's that truly set the values.

Throughout Milford, Highland and the rest of the Huron Valley, the market values have stabilized for now, and in some neighborhoods, values have even started to show slow growth. That growth will continue to be slow and methodical, not like the big spikes of the '90s, because this time, we're coming off the biggest crash of our life times. The banks aren't going to let you leverage "their" money to speculate in the new growth market like they did before, so if you're thinking of bidding up an offer on what seems like a great deal, be ready to bring cash, not a pre-approval letter with you.

The question everyone asks their Realtor

SO... HOW'S THE MARKET??

This is an often asked question to Realtors and Appraisers (and maybe the produce clerk).

But just what is it that people want to know? A few years ago, I think the underlying question really was, "So, how much has my great real estate investment increased in value this month?"

Today when I'm asked, I'm really hearing "Has the value of my terrible real estate investment stopped plummeting yet?"

We all know an agent, that when asked this question ALWAYS says "Things Are Great" while maintaining their silly grin. We've all gone through the seminars where we've been taught to be positive, no matter what. But I guess, depending on what side of the closing table you're sitting on, things may be great once in a while for you.

The truth is, Milford, Oakland County, Southeast Michigan and the entire Country has just experienced the worst decline of residential real estate values in modern times. Most markets I work in have shown a bottoming out of the decline during the past 6-10 months. Some neighborhoods have even had a slight rebound in values. Several markets are still in decline.

I just finished a market study for a six square mile section of a township in Oakland County. Just during the past three years, that area has lost 65% of its value. The good news is that for the past 10-12 months, there has been a steady increase in values (30.7% improvement from the bottom point) that brought it back UP to that 65% loss mark. Looking at the chart at the top of the page, it doesn't look like values could have dropped any further during that first quarter of 2009.

It doesn't show here, but the in April and May of this year, the median sale price was actually higher than the listing price. It's not really a "Seller's Market" being reflected, but the bank owned homes being listed so far below their true current value, that the investors and first time buyers were actually bidding up against each other to win the property. This has been a wonderful opportunity for those segments of the market, but the private home owner who is just trying to get their home sold is losing more value each time one of these under priced bank properties sells.

So, how's the market? ..... Tell me, are you a buyer or a seller. Then I'll let you know.

Another real estate blogger for the Huron Valley

OK... On occasion, I would hear from some folks that I should be blogging. With 17 years of full time real estate experience in Milford, Highland and other southeast Michigan communities, I've advised hundreds of buyers and sellers, concerning their real estate needs. Some of them think I should share with others.

Then there's my 5+ years of real estate appraising. Now, that's a whole separate world. The in-depth analysis of sales and listing data, teaches me more each week about what successful real estate sales and valuation is all about. As a State of Michigan, Certified residential Appraiser, I'm on the HUD roster of approved FHA appraisers. I also conduct appraisal services for property tax appeal, estate settlement, divorce and bankruptcy.

The training required for these two intertwined professions, plus the education that comes from over ten years of holding a Broker License, has made me the "Go To" guy at the office. Take note of my E-mail address and phone number, and consider me your Go To guy for your real estate questions or needs.

My blogs WON'T be long, drawn out ramblings of every thought I might have ever had on a particular topic. Unless the need arises, you won't here from me more often than once a week. There may, on occasion, be links to the truly knowledgeable experts in the field. And, someone out there will be able to relate to my writings, as I'll be drawing from my experiences and observations.

I'll try to keep my thoughts and comments limited to the real estate industry, but heck, I love politics, Christianity, my home town (Milford), and of course, my family, so I may veer off point on occasion.

Your feedback will always be welcome. If my comments have stirred a question, please post it, as others may be thinking the same thing.

So.. for you friends and clients out there that thought that I should blog, here you go. If I receive too many complaints, I'm passing your names to the readers, so they'll know who to blame.