In the current seller’s market that exists in most areas of the country, I can assure you that most buyers will be paying “market value” for a home. Let’s have a closer look at the definition of “market value” (source BusinessDictionary.com): “The highest estimated price that a buyer would pay and a seller would accept for an item in an open and competitive market.” With buyer demand far exceeding supply, it is basic economics that a home will most often sell for its market value.
As I write this post, I am grappling with how to best deal with another agent and their buyer who would like to debate what a particular home is worth based on what my seller paid for it last year and specifically what improvements have been made. The fact that my seller purchased the home as a short sale last year and probably got a very good deal has nothing to do with what the home is worth today. Simply put, it is worth what the market will bear. Sellers are being rewarded with higher prices as the market rises, just as sellers were hurt by price declines over the past several years. Yes “appraised values” don’t always jive with “market values” but with multiple offers the norm in many areas, chances are a seller will get their market price.
If you are a buyer and the right home presents itself I would encourage you to work with your agent to determine if the home is fairly priced in the current market and proceed with your offer. Those that would rather debate what they could have bought last year will get quickly left behind. Real Estate is in fact a competitive market and market based prices will generally prevail – make your best offer today!