Every time I attend a CE class, and I go quite a bit, I hear other agents talking about the listing they had that got 3 full price offers within 24 hours of listing the property. Real Estate nirvana right? Happy buyer, happy seller, happy agent. What could be better? If you're a seller, how about some extra cash? This scenario absolutely drives me nuts! Why? I am an auctioneer at heart. Sure, I list conventionally, but.... When I hear that someone had 3 offers within hours or even days of a listing, I immediately think of two things. 1, The agent has no idea what the property is really worth, nor does their client. 2. What if... What if those 3 prospects, plus others marketed to and invited to participate, all got together and bid competitively to set the real market value of the property? Could a seller use the extra money in their pocket generated by the bidding?
I need to point out that real property doesn't have an intrinsic value. If there are like properties in a specific geographic area, there will be averages of course, but in the pure economic sense, there is no specific value, only what a willing buyer is willing to pay, and a willing seller is willing to take. We pay people that are professionals, trained in the art of appraisal. What is an appraisal? An appraisal is an educated, researched, opinion of value of a given asset in a given time period. The truth is, if you have two or more interested parties, nobody knows what the value really is until the dust settles. We've all reveled at the price that rare collectible, or piece of art brings, some of us thinking that some people have more money than sense. You can do that with real property, ie, that desirable home in the desirable neighborhood that many people wish to move into.
I need to point out that real property doesn't have an intrinsic value. If there are like properties in a specific geographic area, there will be averages of course, but in the pure economic sense, there is no specific value, only what a willing buyer is willing to pay, and a willing seller is willing to take. We pay people that are professionals, trained in the art of appraisal. What is an appraisal? An appraisal is an educated, researched, opinion of value of a given asset in a given time period. The truth is, if you have two or more interested parties, nobody knows what the value really is until the dust settles. We've all reveled at the price that rare collectible, or piece of art brings, some of us thinking that some people have more money than sense. You can do that with real property, ie, that desirable home in the desirable neighborhood that many people wish to move into.
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