What is Real Estate Really Worth These Days?

There is really only one true answer to that question and it has nothing to do with appraisers and comps, it has only to do with the principles involved in a sale/purchase. By definition the true market value of any property is what the buyer is willing to pay and the seller is willing to accept for it.

In the case of a traditional purchase (not a foreclosure or short sale) both the buyer and the seller want to feel as if they have "won", a check box on their victory score sheet is essential in the feel good process of buying and selling property. Buyers want to feel as if they have gotten a deal, the seller wants to feel as if they have not lost equity and value that they feel the property has.

So how do both parties win?

When considering writing an offer the sensitive and sensible buyer may want to consider what the seller is going to feel when they receive the offer. If the offer is based on actual comparables they should be included with the offer to show respect and research. If the offer is not based on comps but purely on budget, then write a letter of explanation to the seller or present this to the agent, make it respectful. Respect is key in this market where emotions are running high, equity and financial gain has been lost by sellers across the board and buyers are trying to get their foot in the door for the next big real estate rise in equity and take advantage of interest rates as well as incentives.

When selling your property and getting offers that you feel are low consider having an updated market analysis done and then ask your agent to show you comparable properties that are on the market, drive by recently sold or pending comparables, consider the true market value as if you were the buyer, look at your home or property as a product at the store, upon review in the current market statistics, days on the market, average reduction in value each month, stop and consider that the buyer has done the same and most buyers are forward pricing their offers, in other words they are offering what it will be worth in 6 months or 12 months at the current rate of decline. Also keep in mind that the improvements you have made to the property might be valuable to you personally, fit your taste to a "T" but not have any real value to the buyer - after all beauty is in the eye of the beholder in real estate as well. Some Improvements have a common value, like updated bathrooms and kitchens, but swimming pools, views and cosmetic things like faux finishes, wallpaper, window coverings and etc. are strictly personal taste and choice so they may be a detriment and not an asset, don't get hung up on the emotional content of such things, keep the big picture in mind.

There is more to negotiate that just the bottom line and sometimes this is where the seller can feel they have gained some lost equity back. A partial short term owner financing can be safely negotiated and especially in the case of interest only the seller can make back equity lost on interest, defer the total amount of gain for tax purposes and manage to sell I n a market where foreclosures and short sales are the primary properties selling. Closing costs is another area to negotiate where you may be able to win on either side, either by asking the seller to pay for all the closing costs so you have less money to put down or by the seller offering to pay because it comes off their gain and tax base. For buyers it can be advantageous to offer a lower price but pay the closing costs totally because it keeps the property tax base lower and that is a long term benefit.

At the end of the day, whether you are the buyer or the seller you will always gain most from a respectful, courteous transaction so take the proverbial walk in the other's shoes and consider their feelings before you write the offer or respond to it and you just may find that there is a way for everyone to win something and we as agents need to help that along by working as a team and bypassing the adversarial stances that can evolve so easily. Successfully closing the transaction with the buyer and seller both feeling that they have won is a win win for us as well.