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Originally Posted by x5GuyInLA
i understand what you're saying about supply and demand...but having an agreement on a price is not the same as setting the market. say a seller lists a home for $500K, but ends up selling it for $450K, who determined that price? it isn't the seller because he wanted $500K. it's the buyer because that's all they are willing to pay. if the seller had any control over setting the market, he would have gotten his $500K and not settled for the lower price, and perhaps selling it for less then they bought it for. if sellers set the market, there would be no short sales or foreclosures because all they would do is put it at a price that would cover their loans and expenses. Maybe we're saying the same thing and it's just semantics, but the only role the seller has in our current market is agreeing to take a price that a buyer is willing to pay.
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Not true. People list at a higher value than what they really want to get for something knowing that negotiations will take place. Maybe in your example the seller wanted to get $450,000 so he asked for $500,000 in the first place?
Short sales and foreclosures are not sales at market value. Those would be examples of below market value sales or distressed sales. Read my post #69 for a complete definition of what market value is. It is pretty clear. The key to market value is a typically motivated buyer and seller. Not an extremely motivated seller as with a short sale or foreclosure.
Also in your example, maybe the seller really "wanted" to only pay $425,000 for the property and ended up being willing to pay $450,000? At the end of the day it is a compromise between what the buyer and seller wants. Market value is set at the point which both feel an acceptible compromise.
Please re-read post #69. It is a good definition.