What is my house worth?

When I am talking with owners who have a house for sale, this is a question I am often asked and the answer that I’d like to say most often is “not as much as you think.”

It’s always the same. When we are selling, we tend to over value property, but when we are buying we  tend to have a more accurate picture of where a particular property sits,  value wise. Then we try to buy it for as little as possible! That is just human nature.

What is the value of a Superman comic book? Try $1,400,000!  It’s true, that’s what a rare comic book sold for recently. While comic books are not houses, there are some parallels between the two. Both share a common principle. Value is determined by what someone is willing to pay for something, in order to take ownership of it. Note this, the seller has no part in setting value. She or he has only one of two options. To either sell it now, thereby accepting market value or choosing not to sell it and waiting until the market value rises (no one waits until it drops).

When you come to think of it, all markets are like this. Food, clothes, petrol, jewellery, shares and stocks, even rare comic books and everyday houses …

It all comes down to supply and demand. Simple economics will tell you the basics.  Short supply tends to increase value. That’s why the rare comic book sold for a record price. On the other hand, seasonal fruit can be purchased cheaply.

Demand also plays a big part. When there is little or no demand, the value drops.

Back to the original question: What is my house worth? It depends on who is out there and what they are willing to pay. Remember too, it is likely that there are other houses for sale near yours, so buyers can choose to buy something else or not buy at all. But really, deep down we already know this. It’s just that we don’t want to feel like that we are practically giving it away.

And of course, we hope it’s worth more than a comic book … (or is it?)