Monday, September 30, 2013

The valuation delusions

If you are thinking what kind of topic I am going to discuss, you may be right or wrong or just guessing. It is how we or I assess what I have and what other people perceive the value to be when you are selling and they are buying and for too long and still going, people who are selling are really in a state of denial unless you have enough money to be still in the state of denial. I mean for example when it is time to sell your house, you factor in the amount of money you have spent on improvements, upgrades to your house, the memories that you have in that house, the location and all the births and deaths, celebrations, heart breaks and other human investments that you have done in that house and then you put a price on it. But is that really realistic when every individual is different and experiences different things in their lives. I mean, I as a buyer would care less if you have upgraded your kitchen to the most beautiful there is or have installed an in ground pool or just painted fresh the house or added some improvement which may give you satisfaction and pride but not to me. And I will care less if you have had big celebrations, heartbreaks or any other kind of emotional or sentimental feelings attached to the house. If I am buying I will put the most realistic value there is based on the market conditions, locations and the value of the house not the subject values that you include in your valuation.

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