Deal or No Deal?

 Everyone's definition of a "DEAL" is different.  

 Many of today's buyers are in the mindset that a "Deal" is purchasing a home below current market value.  What is current market value?  It is the price a willing and capable buyer is willing to pay and a seller is willing to accept.   Below Market sales do not occur in today's web 2.0 world.  Information is plentiful for both the buyer and the seller.  Properties priced below market value are not kept a secret for long.  Homes listed at below market prices wind up getting multiple offers and sell at the price determined by the bidders which is now the market price. Many of these people have not purchased anything and probably will not because they continue to offer below the market price. They are not the only buyer out there.  The demand is still very strong. Recently I heard of a property with 89 offers.  Now that is ridiculous.  Before the internet many properties were kept a "secret" because it took more time, effort and money to get  the information out; so yes purchasing below market value was possible then but not now.

 Some buyers define "DEAL" as comparing it to the original list price.  Some go back further and compare it to what it sold for previously.  I believe using this method is not sound fundamentally.  The original list price could be someone's dream.  The price it sold for a few years ago is not a good comparison because as we now know people were not buying with real money.

 Others define "DEAL" as an opportunity for the long term.  How much will it be worth in a specific time period, 3 or 5 or 10 years from now?  What is their return on their investment as compared to other investments with similar risk?   What is the downside?  These people look at what sold recently, what sold previously and what is available today.  Using this definition of a "DEAL" has made many investors and homeowners in the past very happy and will continue to do so for years to come.  People using this are not concerned with what the price is 3 months from now or a year from now.  They are concerned for the long term.    This method has made many people very rich.

  There is another group of investors and developers that define "DEAL" as an opportunity to add value.  I do not see many of these in the market place today.  They generally like to add value and move on.  They add value by remodeling, adding additional space, changing the use of a property, etc.  I recently sold a personal investment property like this.  I did not have the necessary skills or finances to add the value.

 So which "DEAL" are you looking for?

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