"Gut Check" Questions

Buyer's Market Tests
Sellers' Resolve, Patience

Every market poses its own "gut check" question.

In a strong Seller's market, the "gut check" question Buyers must wrestle with is, "how much do I really want this particular house?" That's especially true if there are multiple offers, and the winning offer is likely to be over the asking price -- sometimes well over. My advice to Buyers in this predicament is, "the right price to offer is the price you can live with if you get the house . . . and if you don't."

Today, Sellers are having to face their own version of this question. In a strong Buyer's market, many Sellers receive offers well below their asking price -- if they receive any offers at all. Often their realtor can work with the prospective Buyer to improve the offer . . but not always. The question such Sellers must ultimately weigh is, "If I pass on this Buyer's offer, am I willing and able to wait for another?"

In the final analysis, "fair market value" for any given property, at any particular moment, isn't about the comp's (comparable sold properties), general market statistics, historic cost, etc. Rather, it's what a financially qualified Buyer is willing to pay.