There’s one economics lesson I learned by observation — the market sets the price.
It works for everything, but I’m specifically talking about property.
Here’s how it works:
What determines the price a house or land will sell for is what someone is willing to pay for it. Not the listing price.
I’ve seen it in action. A property priced at the high end of other similar properties, eventually gets an offer that is less, bringing it back to that median range of its competitors.
A property priced in that median range usually sells faster, and for close to asking price.
And a property priced low, but just as good or better than its competition, will get multiple bids. Particularly in the seller’s market we have in upstate New York right now. In the end, that underpriced property may sell for the high end of its expected range.
When you’re the seller, it’s hard to swallow this. But if you’re motivated to sell, keep it in mind.
And if you’re a buyer, you’re the market. You determine how much a house is worth, by deciding what you’re willing to pay.