Sellers and buyers can both benefit from the concept of obvious value. When sellers offer their property in both price and condition as an obvious value compared to the other homes on the market, their home will sell in any market. Conversely, when other homes are positioned as obvious values as compared to the seller’s property, the seller’s property will be used as justification for buyers to buy other properties.
If prices are declining, utilizing the obvious value strategy will often net the seller the most money. If it is not used, sellers will often find them self chasing the market down and ultimately selling for less.
For buyers, acknowledging obvious value is probably the best barometer of whether their decision is a good one or not. The media will talk about the market, but they will never be able to compete with a buyer’s knowledge after comparing properties.
Buyers sometimes hesitate because they want to be sure their decision is the correct one to make. The media will talk about the market being up or down versus this month or the same period last year, prices up or down as compared to the same, or increases or decreases in the number of sales. It’s no wonder a buyer may second guess him/herself or want to wait for better media signals. The other confusion comes from whether the media is talking about the national numbers, the state’s numbers, or the local housing numbers. What they are never talking about are the obvious values that exist in every market.
Finally, obvious value applies to not only price and condition, but also terms. Interest rates, seller concessions, and contract specifics can often be used to sweeten or cause a property to become an obvious value. For a more detailed analysis, or for help in determining obvious value, consult your local REALTOR.