Price Vs. Value Of Real Estate

Value is not the same as Price -- except on the day you close and take title to an object of your desire. Value implies the Worth of a specific thing or group of things, usually expressed in terms of dollars. Everything has at least two values:

1). its basic functional value and

2). Its esteem or psychological value. We will pay for Class, sometimes.

The example of a new car addresses this matter. The least expensive brand new car from any manufacturer has the new smell, and with todays average equipment will deliver the two of us from point A to point B in a safe and timely manner.

That is considered transportation. The same basic function of people transportation can be performed by a vehicle from the same manufacturer, with a sticker price that is double or triple that of the first vehicle; and, we can say we had an added Value of Class. The additional dollars invested for the more expensive vehicle was invested for esteem value, psychological value, (or class)!

B. How Does It Work? The Knowledge of Value is what really works! By analyses In Real Estate, value is expressed in terms of dollars with approaches or definitions:

1). The Comparative Market Value is determined by Analysis (CMA) and that tells us the prices for which comparable homes or properties in a comparable neighborhood have sold;

2). The Replacement Value expresses in terms of dollars how much it would cost you to buy a comparable building site, in a comparable community, and to build or to develop a comparable home or set of improvements on the land; and,

3). The Income Approach to Value expresses in terms of dollars what a specific property is worth based on an investors criteria for investing. The EBA will provide the analyses and perform the due diligence regarding your selected property. And, as we proceed with our work, You will say when it's enough.


C. How Can It Help Me? An astute Buyer wants to buy value not price! It is the desire of most Buyers to get good value for every dollar invested. When we get a return in excess of normal expectations, for the dollars invested, we say, we have made a good deal! Paying too much can be like buying hot air in a balloon. It can go away quickly. A good motto is to pay price only when equal value is demonstrated.

Pay over value only when your esteem value kicks in. Then, with awareness of what you are doing, go ahead and nudge the market a little higher or just outright buy the class that you strongly desire and probably deserve! In any event be good to your self!


D. When we fall in love, with an object and desire it greatly, we will sometimes pay full value for it. If it is rare and the demand for it exceeds the supply of similar objects, we sometimes see both higher asking prices and higher selling prices. When a Buyer decides to part with the dollars to OWN the object, a value has been determined in that market. When prices continue to rise and Buyers continue to buy, we witness what is called a Sellers' Market.

Value knowledge in the hands of a well-qualified Exclusive Buyers Agent (EBA) is a tool that can be trusted. This tool will be skillfully used to demonstrate true values to the Buyer/Client.


E. Consider Other Values:


1). Think about Shelter Value; That is very basic. A roof over ones head while one eats, sleeps, entertains and on and on according to one's Lifestyle has value. Anything beyond basic value is psychological or esteem value, as we have said. Budget usually determines how much esteem value we can build into a shelter package.

2). Think about Investment Value That could be very important if you decide to sell in three to five years! You may be thinking primarily about a roof over your head. Thats very basic and very important! But, if we can save you money and build in Future values or benefits as we go, isnt that what you would really prefer? Your EBA will provide you with the information needed to make calm, sound business decisions regarding Investment in Shelter.

3). Think about Confidentiality and Loyalty Values Your motivation and secrets are secure with an EBA. You give the instruction. The EBA follows your instruction. Together, we will find your comfort level and affordability limits.