Feb. 17, 2006: In real estate, market value is the rule: You cannot sell a house for more than it's worth, and you cannot buy a house for less than it's worth
The conversation usually runs like this: "So, how much did they pay for it, anyway?" Then comes the follow-up: "And they haven't actually done anything to it since they moved in, right?"
Do you see where this is going? It's a home buyer talking himself out of a house.
He thinks he's coming up with the rationale for a low-ball price. He'll start with the price the sellers paid on the way in, falsely equating past market conditions with the present. Then he'll try to figure out the added value of any remodeling the sellers might have done. Finally, he'll consult a mystical internal calculator to determine how many thousands of dollars below the asking price to offer.
What does this have to do with the market value of the home? Nothing.
What is the likely outcome of trying to "steal home" like this? Nothing.
A home is worth what it's worth, which means it's worth what other similarly situated buyers would be willing to pay for it in a reasonable amount of time. It doesn't matter if the sellers paid 10 cents or $10 million. It doesn't matter if they replaced everything or changed nothing at all. All that matters in negotiation is how close the offer comes to the amount the sellers have good reason to expect, and how reasonable their expectations are.
In a normal market, you cannot sell a house for substantially more than it's worth, and you cannot buy a house for substantially less than it's worth. Making arguments to yourself about what the sellers should get is pointless. What they will get is the market value, or very close to it. If not from you, then from someone else.
The market value of a home is what that home will bring. Not should bring, in some ideal of perfect justice. Not could bring, in a comforting fantasy. The value is what it will bring. Offer less than a reasonable amount and you will see it sold to another buyer instead.
Greg Swann is the designated broker for BloodhoundRealty.com, a full-service Metropolitan Phoenix real estate brokerage. This article originally appeared in the West Valley regional sections of the Arizona Republic.
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