We are often asked when the real estate market will return. The answer to that is when we are only dealing with type two and three sellers.
The three types of sellers are as follows:
#1 - Must sell within 30 days at any price. These are usually bank foreclosures, people with financial problems, going through a divorce and people for one reason or another have to sell. These people will keep lowering their prices until they get a buyer.
#2 - Normal seller. This is a typical seller who will sell at a market price given a normal market. This is the typical seller you usually have in the real estate market.
#3 - My price, my terms. This is the seller who says he will sell at his price which usually has nothing to do with market value. We had a lot of these sellers in 2005 who were able to get exorbitant prices for their property simply because we had so few sellers and lots of buyers.
The problem is, the type 1 seller drags down the market because a buyer really does not care what kind of situation the seller is in. They just want the best buy they can possibly get. The market will not return to normalcy until we get all of the type 1 sellers out of the market.
