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The Asking Price of a Property Does Not Determine Value

By Bryant Tutas

Real Estate Broker/Owner with Tutas Towne Realty, Inc and Garden Views Realty, LLC BK607690

March 11, 2011 07:51 AM

Hi folks. A potential buyer asked this about a property listing earlier today.

"Why would these owners raise the price of this home in a market where no one is buying in Florida? We live in Virginia and are planning to move to Florida so we know there are tons of home better than this one for much less. Why on Earth would they raise the price?"

The question is based on the Buyer's perception.

Here's the reality.

Hi Hopeful Buyer. The property is being offered as a short sale. It could very well be that the current lender has completed their price evaluations and has come back with a value higher than the asking price. Therefore the asking price needed to be raised. This is actually quite common.

While property prices may be very low right now the reality is that properties are selling at a rapid pace. Properties that are priced right are flying of the shelves and usually with multiple offers. It is not unusual for a property to sell for quite a bit more than the asking price. The asking price has nothing to do with the value of the property.

So..... I wouldn't be too concerned with the asking price. When the time comes, base your offer on the true value of the property. A property that's worth a $100,000 is worth $100,000 whether it's priced at $75,000 or $125,000. Make sense?

Are you facing foreclosure in Florida?

Do NOT be foreclosed on! Avoid foreclosure. Short Sales DO close.

Want to find out more? www.CentralFloridaShortSales.com

***I am NOT an Attorney nor do I play one on TV. Click the button below for my Bio.

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Glenn Roberts

Retired - Seattle, WA

Makes a world of sense, Bryant. This is not a dealer show room or a Walmart. The price is based on the agent and seller agreeing where to market to house for best exposure. The value is what a buyer will pay (and an appraiser will appraise.).

Mar 11, 2011 08:01 AM

Deepak Chauhan Asso-Broker, MLO

Versailles Property - Irvine, CA

Your Solution-Oriented Realtor

Yup you are right, seller/Agent can ask ALL they want.

Mar 11, 2011 08:09 AM

Steve Loynd

Alpine Lakes Real Estate Inc., - Lincoln, NH

800-926-5653, White Mountains NH

I had a short sale listing on the market for $219,000 for months no serious lookers never mind offers. When we decided to drop the price to $199,900 we had three offers inside of a week. The price was negotiated at $15,000 more than the asking price because three people wanted it. The market value is what someone is willing to pay.

Mar 11, 2011 08:21 AM

Michelle Francis

Tim Francis Realty LLC - Atlanta, GA

Realtor, Buckhead Atlanta Homes for Sale & Lease

BB,

Yes, no sense getting for a buyer to get hung up on the list price. Sometimes it is priced too low and they will need to offer higher to get it, sometimes the owners and listing agents are crazy and it will never get the price it's listed at. It all depends and the devil is in the details.

All the best, Michelle

Mar 11, 2011 08:59 AM

Cynthia Larsen

Cotati, CA

Independent Broker In Sonoma County, CA

That happens quite a bit here too with short sales. The seller doesn't really care what the listing price is since they will not be walking away with any money.

Mar 11, 2011 09:39 AM

Kim Dove

Watson Realty Corp - Jacksonville, FL

Realtor - Jacksonville FL

It makes perfect sense to me BB. If only more buyers got it!

Mar 11, 2011 09:43 AM

Gary Woltal

Keller Williams Realty - Flower Mound, TX

Assoc. Broker Realtor SFR Dallas Ft. Worth

Bryant you are right in your explanation. Asking prices mean nothing. They are just arbitrary and fantasy prices. If you are buyer offer what YOU think it is worth. It will either work out in the negotiation or not.

Mar 11, 2011 11:15 AM

William J. Archambault, Jr.

The Real Estate Investment Institute - Houston, TX

Yup!

So what?

"The Asking Price of a Property Dose Not Determine Value"

It doesn't determine the sales price ether!

Bill

Mar 11, 2011 12:17 PM

Steve Shatsky

Dallas, TX

Hi Bryant... It's important for everyone to remember that the ONLY thing that determines value is what a buyer is willing to pay for a property,

Mar 11, 2011 02:56 PM

Gabe Sanders

Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL

Stuart Florida Real Estate

This is a great way to explain value Bryant. Unfortunately not every one gets it. Some folks are hell bent on the department store mentality and want to buy something at 50% of list price. Doesn't really matter what it's worth.

Mar 11, 2011 11:21 PM

Bob Jakowinicz

National Realty Centers Livonia--Bob Jakowinicz - Livonia, MI

Michigan Real Estate Agent-- MI Real Adventures

Great post! So true many just look at sales price and want a bunch off of it. Know our market and run the numbers will give us a true cash value and that's what the property is worth more or less the asking price.

Mar 12, 2011 12:35 AM

Jeff Dowler, CRS

eXp Realty of California, Inc. - Carlsbad, CA

The Southern California Relocation Dude

It's a pretty simple concept. Too bad so many sellers, and buyers, do not understand it.

Jeff

Mar 12, 2011 03:08 AM

TheMillsTeam YourSebringRealtors

Advantage Realty #1 - Sebring, FL

863-212-5441

I find that many buyers don't understand the concept behind short sales at all. If the bank turns down x amount 3 times, does that mean they will finally accept it at the 4th try? I think the media is doing their fair share in conditioning buyers to feel they are entitled to 50% off of a property that is already 50% off.

Mar 25, 2011 11:10 AM

The Asking Price of a Property Does Not Determine Value

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