Tuesday, June 24, 2008


I have been asked by Homes & Land Magazine, Orlando/Central Florida edition, to write an editorial to be published in their up coming edition. Since we have seen such a tremendous transition in the last few years in Real Estate across the country, I have decided to write a short general description of the different types of Real Estate Markets. This is my article as it will appear.......perhaps it will help you.


Buyers and Seller’s continually have to adapt to changing market conditions and determine the type of real estate market that exists. Although there are many variations and twists that affect the current market, basically real estate markets fall into three categories. Whether you are a buyer or seller you should always consult a Realtor® to help you understand where the current market falls and develop the best strategies to achieve your goals.

Neutral Market
Neutral markets are balanced. Typically, interest rates are affordable and the number of buyers and sellers in the marketplace are equal. Good buys exist in neutral markets, but no particular conditions exist that favor buyers or sellers.

Buyer’s Market
A buyer’s market exists when there is a surplus of inventory…….more houses for sale, than buyers. Buyers have many homes to choose from, and not each home for sale will sell. Smaller numbers of buyers will result in fewer sales which can alter prices. In this type of market buyers have more negotiating power, prices tend to fall and homes take longer to sell.

Seller’s Market
A seller’s market exists when there are more buyers than available inventory. In this type of market there are fewer homes available then buyers. Generally home prices rise higher than they normally would and homes sell quickly.

Homes are taking longer to sell. Homeowners facing a financial hardship do have options prior to selling or losing their home that they could explore. For owners behind on their mortgages, the first option is to try to find a way to catch up their payments. Borrowing from relatives or asking the lender to refinance the mortgage is among the options. Many lenders may be willing to extend the term of the mortgage, add any delinquent payments to the loan principal or adjust the interest rate to make current payments easier to maintain. In a stagnant real estate market with declining sales and inventory growth sellers must find a way to stand out from the competition, many looking to Short Sales or Auctions.

Short Sale
A short sale could be when the net proceeds are not enough to cover the mortgage obligations and closing costs, such as property taxes, transfer taxes and the broker’s commission and/or find themselves in pre-foreclosure stages. We are currently experiencing a rising trend throughout Florida… and the number of sellers facing financial difficulties being clearly on the rise in all price brackets. At the same time, a decline in sales prices over the past two years has left some sellers with little or no equity in their homes—sometimes called an “upside-down” sales situation. However just because sellers are behind on their mortgage or are having financial difficulties doesn’t automatically make the short sale an option. A short sale involves the seller’s negotiating this option with their lender and this type of transaction is a lot more work to successfully complete, it should always be handled by a professional Realtor®

There are two types of real estate auctions: Reserve Auctions and Absolute Auctions. In an Absolute Auction the property is sold to the highest qualified bidder with no limiting conditions on the purchase price. A Reserve Auction is one in which sellers establish an undisclosed Reserve bid or minimum price at which they will sell the property. They are not obligated to execute a sale unless the bid reaches this Reserve. The Auction Company, very often working with the listing Realtor, will market the home and hold Open Houses prior to the actual auction, creating more exposure for the home and hopefully resulting with a qualified buyer.

1 comment:

Permission to Mother should be studying said...

Congratulations on getting published in Home & Garden!