Now I know the housing depression is over. A couple of years ago during the height of it home owners were worried that they would not be able to sell or that they would not get their asking price.
This year some sellers act as though it is 2005. They tell me that their house is worth a lot more. The house was built with the bigger better nails and it is at a special angle, in a special place and it is one of a kind.
They use what I call seller math. They tell me how much they paid for it and then they add on the cost of the new roof and windows and all of the other work they did to the home and then they multiply by a random number, and they compare it to the much bigger house down the street that was built using the smaller nails and doesn’t have the same charm, but the owners listed it for sale for X amount so mine must be worth at least that much too and maybe more because of those wonderful nails that were used when it was built.
Rationalizing a value doesn’t make it so. I know I would have a tough time pricing my own home. I would either ask one of my Realtor buddies to do a market analysis for me and or I would have it appraised by a professional appraiser. As a home owner I have a hard time being objective. My house was built using a lot of those old square iron nails.
Most people who buy a home need to use some kind of financing and that money usually comes from a bank . Before they loan money they have an appraiser determine the value of the home because the home is collateral for the loan. A low appraisal can stop a sale from happening. Appraisers use a different kind of math than the math that home sellers use and they do come up with lower numbers than what the seller or buyer had in mind.
Home buyer math is even more interesting but I’ll save that for another day.