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Whether you remember it or not, one of the lines in the movie that really caught my attention…and I am paraphrasing, although I think I am close…was “the question is not what does it cost, but what is it worth?!”
Oceanfront homes in my area are selling in the $1000 to $3000+/SF range at the moment. Based on size, some homes would probably sell in the $200 - $275/SF range away from the beaches. 
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43 Comments on The Question is Not What Does it Cost, But What is it Worth?!
Jeff - This is such a great point of view and so true, especially when it comes to ocean front property.
Good morning Jeff - this is such a great post. What's valuable to one buyer isn't necessarily to another buyer and that's why "Worth" isn't only about dollars.
It's along the lines of the thinking, do you just want it or do you need it? Better impluse control on spending means value is exchanged or you wait. Or dicker. Or decide in time, you are all set. Don't need it, but kinda went crazy hankering it. Oldest daughter picking potatoes got paid 60 cents a barrel. Saw something at Walmart at 9 years old costing $3.60. She picked up an item, studied it, put it back. Saying, Dad, that's not worth six barrels of potatoes. If it had been cheaper and worth the trade, she would have let go of her money. Bought it. Took very good care of it. Pass. Keep looking and in the meantime hang on to your money. Making better use of it or saving it for when a deal comes along.
Yes I agree.... Somethings are very hard to put a dollar worth on.... Happy Day!
So true -- but a perspective that can be hard to communicte to clients in the emotional moment of decision. I recently had a transaction fall through because the house didn't appraise. The sellers would not come down, and the buyers' friends and family were telling them they'd be fools to pay "more than the house was worth." An appraisal is written in water, not stone -- it'll be different a three months from now. But the focus on price made it hard to realize the value was there.
After finding the home that was just what they wanted and needed. The buyers wanted to make a really low ball offer. I looked at them and said ( I thought you ready liked this home and it was just what you wanted? ) Your offer does not show that to be the case and may even start the negotiations off on the wrong foot with the sellers...
Make the offer based on the value but not let's see what the least they will take..
Jeff, that movie line has many uses and for sure sellers need to heed it time and time again...great share & Happy New Year!
Jeff, it seems that sellers and buyers look at value from a different perspective. In the end negotiating a value both the seller and buyer agree on is the true worth of a property.
Good morning Jeff. I really like this and agree with you. Cost and worth are significant and not always the same. BTW, I still use AOL.
My father in law lived on the 27th floor in a condo on Miami beach. If you looked left you can see the ocean. If you looked right you can see the inner coastal. What was that view worth? A lot.
Great post!
This is a reason you can not look at annual home appreciation figures because they are not an exact science...homes get improved over time...monthly carrying costs of homes can go down due to lower interest rates driving up the prices not based on real supply and demand but on just affordabilty. A home is worth what someone will pay for it given all prevailing conditions....so long as an appraiser agrees.
Every home I ever bought I thought was worth what I paid for it. If someone sees something and their hearts get to thumping, they should move accordingly...good post
You hit the nail on the head. Perception of value is just as important as the reality of value. Some people because they don't care about the ocean views will not sign the same value as those who perceive it as being the perfect location. As you say the inland properties are far less expensive than those in the ocean.
I run into similar location-based issues with clients here. When they want to live someplace they can't afford but don't understand why the prices are so high I run through the pricing history and trends. They quickly see that the pricing driven by the market will not change regardless of their perceived value. As such they can decide to stretch or look elsewhere.
Jeff - I really LOVE this post!
Some friends are renting a beautiful home in a prestigious historic neighborhood that overlooks an amazing pond with a fountain - and swans to boot. The owner offered to sell them the house at about $50K above market value. They asked my opinion, and after touring the home and looking at the comps, I said, "Write a check and buy it!" You came here to retire in your dream home, you have the money - and I think that view of the pond is worth $50,000!!" They were really pleased that I approved of over-paying for the house - because this home was PERFECT for them. They called the owner right away and wrote a check - they are happy as can be!
Gary - all of which will vary in worth, right
Kristine - agreed, obviously.And it varies by community, too, doesn't it.
Paula - I think that often for some sellers it is worth giving up some money so they can move to be near grandchildren, other family or to a new location. Some things are hard tp pin a monetary cost on
Mike - oh yes. And many do not seem to realize that and think that with the price shifts these past few years that beachfront probably is not worth what it was. Still is. It just might cost a LITTLE less
Joel - it's so true. And sometimes the inflated worth is on the seller side, right?
Michelle - it was a fun movie and the AOL memories (sounds) were kinda neat. But that one statement really rang out to me. But it applies to so many things, as it did in the movie.
Don - it's so true. And OUR value if knowing how these factors impact the differences in price
Jeff
Brian - agreed. But so often what a seller thinks their home is worth is not at all the reality. Maybe it;s worht it to them (that's a good question to aks - would YOU buy this home for $xxx?)
Carla - that is all so true. I often ask people what something (a commute, proximity to beaches or shopping, etc.) is worth to them
Nancy - so true. And that car vary widely for the same house.
Joan - I think this is the case of many who want to sell but know they cannot get as much fo their homes as they paid back at the peak, or even before. You have to also ask...is the pain of waiting and not getting to where you want to be worth giving up some of the money?
Ginger - so true, especially with beach property. There are 900 SF major fixer bungalows selling for $2M+
Jeff
Great post! I feel like it's all about location in San Diego, and not just the home itself!