A Common Belief Among Homeowners
Many owners believe:
“I lived here, maintained it, and paid for it—my house must be worth more.”
This belief is driven by emotional attachment and personal cost, but the property market does not price assets based on owner sentiment.
How the Market Really Values Property
Buyers and the market focus on objective factors:
Location and area potential
Actual transaction prices nearby
Physical condition and depreciation
Legal encumbrances
Occupancy status
Transfer and resale risk
Past owner cost is not a pricing factor
Why Owner Expectations ≠ Market Price
Early mortgage payments are mostly interest
Buildings depreciate over time
Markets rely on closed deals, not asking prices
Buyers always price in risk buffers
Overpricing often leads to:
Unsold listings
Longer holding periods
Higher interest costs
Legal and enforcement risk
The Role of Inspection and Auctions
Property inspection (EP.7) reveals reality.
Auctions (EP.8) let the market decide price through buyer competition at different risk tolerances.
Adjusting Expectations Enables Real Sales
Accepting market reality is not losing—it preserves net value by reducing time, interest, and legal exposure.
FAQ
Q1: Does overpricing help negotiation?
A: Usually no; it deters buyers and delays sales.
Q2: Does a low appraisal mean low value?
A: No. Appraisals are reference points, not sale prices.
Q3: Why do buyers bid much lower than expected?
A: They price repair costs, risks, and resale uncertainty.
Q4: How do auctions fix pricing errors?
A: Competition reveals real demand-based pricing.
Q5: Is accepting a lower price always a loss?
A: Not if it avoids interest, litigation, and enforcement.
