Why don't people understand a house is only worth what someone is willing to pay/able to borrow?

Question

Champagne that would work if there was only one buyer in the whole country with 10k. But supply and demand means that there won't be.

Answer 1

You are correct, but on the other hand, there will always be someone willing to pay more for a particular house in a particular location then others-An example is the houses in my area will appraise at a certain amount of money, based on square footage- however, the Realtors will add $15,000 to the value of the house because of the high demand for houses in this area-Every doctor, lawyer, and Indian chief wants to move out here because of the school district we have here-we live in a rural area 20 miles from town,  and crime rate is almost non-existent , and virtually no drug problem. The school is rated in the top 5 in the state.This is the type of area that people want to raise their families in. Therefore they are willing to pay the $15,000 premium to move here. A houses worth now depends on it's location more then the shape it's in.

Answer 2

You are absolutely correct.

Answer 3

If someone is really keen to get a house, they will be willing to pay ....  so to answer your question, as you describe, yes  -  it is worth the price.  And if someone is willing to pay more, then it is worth more.

Answer 4

that makes no sense.

Answer 5

Because people are not educated in economics in highschool (or even college).

Answer 6

Don't know, my daughter has had two house sales fall through because of this. Whatever the house is up for the mortgage broker will only offer a mortgage for what their valuer says it is worth not a penny more. Who is supposed to make up the short fall? It is hard enough to save up for the deposit never mind any difference of valuation.

Answer 7

I am about to put my house on the market and if the buyer does not offer a fair price, he or she will not be buying my house.

Answer 8

You are correct. Because their home is an emotive issue rather than a plain matter of fact business dealing, which is what buying a house is -it should be about practicalities and finance.

People lose their "marbles" over houses and get themselves into hot water very quickly.

The developers know this, and that's why they make those show homes, so cosy!!!!!!

Answer 9

Its not. If you could only afford to borrow/pay 10k for a house worth 500k it doesn't mean the house is only worth 10k does it?

Answer 10

I liked the part in the article about the woman who can't find a buyer to pay what she's asking.

Duh!

She's asking too much.

She has 2 options.

a) lower her price

b) don't sell

Economics is a very simple science.

Answer 11

well some people believe in the fairies to.

Answer 12

In a way that is true. Like most things someone will buy if they can make a profit later on. But if there are no buyers, then the price has to be reduced. It is like investing in art. A picture is only worth a lot of money if the ower can make a profit from selling it, and the buyer can make a future profit.

Answer 13

Do you mean that houses aren't magical cash boxes that double in value every few years?

No wonder the American economy is in the toilet-too many people here believed that they were.

The whole housing market is a house of cards built on a shaky foundation.

Since the people on the bottom can't afford to keep it propped up, it will all fall down.

All the greedy people in the line from the real estate agents to the Wall Street investors kept letting bad loans slide though.

This was to make up for the fact that there is no real industry left in America.

Answer 14

This house pricing is a joke. If people want to sign their life away to call themselves  homeowners, good luck to them. But they can't complain when things go wrong. Why don't people just enjoy life, rather than commit themselves, and their families, to a life of debt.

Answer 15

I think there should be a cut-off percent of what one can make on a house....( I'm gonna get blasted for this one)