Isnt it true that the true worth of Real Estate is only what someone will pay for it?

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April 18 2012 - Victorville
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the value is subject to what a buyer is willing to pay, what the appraisal dictates, AND most importantly which offered price and terms the seller is willing to accept
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November 30 2013
it's "worth" what a buyer will pay for it AS LONG AS the appraiser and the bank agree!!!

If the appraisal comes in lower, then that trumps the buyer's opinion of worth!

shoot - just noticed the date this was asked - oops!
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November 30 2013
Profile picture for Pasadenan
Another perspective of "worth"?  What would it cost to replace if destroyed?  That is the "worth" used by insurance companies, which often has nothing to do with "present market value".  Not to mention, some things cannot be built presently due to code changes, thus existing conditions may have been "grandfathered in".  Thus insurance companies also put in riders for "code upgrade" so that what is there can be rebuilt.

The insurance policies for older homes often have 3 different levels of coverage to choose from, which is essentially a measure of worth.  The least expensive is enough to buy something similar in a similar nearby area, and bulldoze the house down and sell the land empty for new development.  It will cover repairs of partial destruction up to the policy limits.  When doing the repairs, it is up to the local building department if a sufficient amount of the structure is being replaced to require bringing that section up to present codes.  The most expensive is to "replace in kind", meaning that building materials no longer readily available would have to be obtained, such as solid heart rough cut redwood girders and framing.  Or mortise lock sets with crystal door knobs.  And wood lathe with plaster walls and ceilings instead of drywall.  This may be more important for homes on historic registries.

My objection to the original post is not only the word "true", but also the word "only".
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November 30 2013
Profile picture for SoCal_Engr
While this thread is a bit dated...

I would argue that establishing "true worth" is almost impossible. Aside from the intangibles that any individual can bring into the assessment of "worth" (e.g., familial history, perceived historic significance, perceived ecological value, etc.), there is the simple fact that some may have a longer-term vision than others and are able to perceive worth/value that those with more immediacy will not acknowledge.

But, if you want to change "true worth" to "market value", then the OP would be correct...assuming the buyer did not need the approval of someone else. Failed appraisals are an indication that some people are willing to pay more than what others think a property is "worth" - bringing the discussion back to "establishing...".

Of course, all of this is philosophical yadda-yadda if all one is concerned about is "what can I sell it for today?". If that is one's context, then the answer is "Yes" (although I'd argue that the imposed context is just one of a number of perspectives that could be applied).
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November 30 2013
Yes! The buyers set the actual value by what they are willing to pay for a given property.
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November 30 2013
Profile picture for sunnyview
In an open market, yes.
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April 22 2012
Profile picture for Pasadenan
I've noticed in many cases, historic trees are worth more than a lot or the structures on the lot... but in most cases, the buyers are not willing to pay for historic trees.  That often is not what they are in the market for.  That is usually just considered an "extra" or "bonus".  Some buyers don't even have any respect for the trees, and think it is just a "liability" that will damage the driveway and the house foundation, and may fall on someone or something.

Just because there are no present buyers willing to pay what something is worth doesn't necessarily mean it is not worth more.  "Present market value" based on what a willing buyer will presently pay is only one measure of "worth".  There are a multitude of others.

And in some cases, it is just that the marketing isn't being targeted to the correct market sector and potential buyers.

Some people also have the ability to see potential market changes 10 years ahead.  What someone will pay now often doesn't reflect these "future" potential benefits.
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April 21 2012
sounds like California...holy guacamole

Yes avocados are in season now....
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April 21 2012
how can you put a price on a place where a family grows...avocados using it's own natural spring water

sounds like California...holy guacamole
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April 21 2012

YES.... thats true of any good or service (real estate included)  think of it this way if an ipad was $20,000 how many do u think would sell?  Pricing anything too high results in fewer buyers able or willing to buy .... and pricing to low will result in everyone buying (or wanting to buy) eventually leading to supply shortages....

pasadenan if you plan to "keep" something it may have value, but everything is worth something, meaning you would sell it for some price if offered.... if you never intend on selling something regardless of price offered (such as family treasure), its only worth is a "number value" on a balance sheet, but economicly "priceless"

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April 21 2012
I have heard, whatever you are selling is only worth what another person is willing to pay for it..be it  services, goods, Real Estate or Whatever. I think it's true.
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April 21 2012
.... only for base tax year purposes....
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April 18 2012
Profile picture for Dunes ..
For that large number of people who find a natural water spring on the property has healing and natural health properties or who produce sufficient Avocados each year to bring in 10 times what a Realtor tells you someone will buy the house for ...perhaps a claim that is not what it is worth could be made


For that small number of people not that fortunate I feel an argument could be made for "Isn't it true that the true worth of Real Estate is only what someone will pay for it"
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April 18 2012
Profile picture for Pasadenan
No!  That is only what it is "worth" if you plan to sell it.  That is not what it is worth if you plan to "keep" it and know things about it that others may not!  Who knows?  It may be producing sufficient Avocados each year to bring in 10 times what a Realtor tells you someone will buy the house for.

Or maybe a natural water spring on the property has healing and natural health properties?
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April 18 2012
 
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