You're An Exception Mr. Seller!

One sticks to an opinion because he prides himself on having come to it on his own, and another because he has taken great pains to learn it and is proud to have grasped it: and so both do so out of vanity. - Friedrich Nietzsche

Ever hear of the hard seller. Maybe you have them just around you, owners who believe they’re an exception, the idea that their homes are growing in value while real estate prices all around are stable. These owners truly believe that somehow their property is unique and different, a home so wonderful that general sales trends and everything else is irrelevant. They are unwilling to see any relation to reality. These kind of whimsical prices seem to enhance throbbing egos and hulabaloo rather than result in deals.

While such owners, having once they are firm and sure in their minds what a property is worth, sometimes see any lower price proposal as a loss when that's not the case.

If the home has been on the market longer while local properties typically take less time to sell.

Then what is "fair market value" and how is this number determined? The term "fair market value" generally means the price at which a seller will freely sell and a buyer will freely buy. Legally speaking definition speaks, "Fair Market Value is the price for property which would be agreed upon between a willing and informed buyer and a willing and informed seller under usual and ordinary circumstances; it shall be the highest price estimated in terms of money which property will bring if exposed for sale on the open market with reasonable time allowed to find a purchaser who is buying with knowledge of all the uses and purposes to which the property is best adapted and for which it can be legally used."

But what really happens is that house that is overpriced by 10 percent of its actual market value is much less likely to sell within the first 30 days than one priced within 5 percent of its true value. Not only does an overpriced home takes longer to sell, it is also likely to sell for less than its actual value. More so because of the negative effect often associated with properties that have been on the market for a longer than average time.

But referring to Market values is important because if a property value is set too high it's likely to languish on the market. If the value is set too low then owners won't get full value. The same problems also impact buyers: If the property is over-valued you'll pay too much if you buy, if it's undervalued it will be quickly sold, perhaps before you get to it. Also read, How NOT to lose your sight in the Indian Real Estate Market.