The Real Estate Market May Be Smarter Than You – Part 1
Yes, you heard it - the market is smarter than you. And, for what it’s worth, it’s smarter than me too. At school I learned the following: The Law of Supply and Demand is the relationship between supply, demand and price. More specifically: Increased demand results in increased prices; Decreased demand results in decreased prices; Decreased supply increases prices; Increased supply decreases prices; There are many buyers and sellers who think they know better and that they can beat the market. Here’s an important lesson worth learning about the market: Market Value: The market determines how much a house is worth, not the seller, not the buyer and not the agent either. The point at which a seller and a buyer agree to exchange a house for a certain amount of money, is called market value. Overpriced homes don’t sell - Under priced homes get multiple offers. That’s the market doing its thing. Some scenarios to consider Scenario 1: Multiple Offers A seller sets an asking price of 800.000 Euro 8 offers are made Some of these offers are at, or below the asking price One or two of those buyers really want the home and made an offer above asking price, let’s say one of [...]
