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.