Well, simply said it is the amount a buyer is willing to pay for it or (if the house is not for sale yet) the amount the house would likely sell for. Capturing this in one sentence is easy though often the reality is not that simple. Any buyer wants to close the best deal possible as do the seller. Scraping of like $10.000 from the purchase price of the real estate is a relative small percentage/portion but for most of us a huge sum to spend on any other things.
Although there are certain variables to lean on, determining the right price for any property is not math. The size of the plot, the age and condition of the build and the location are often setting the scene. Then any (pretty) recently sold houses in the neighborhood are used as a reference. That together creates a number. Many sellers will disagree with the number a realtor comes up with, as “their home” is always special, that’s why they bought it in the first place so many years ago. They probably do not see or hear their own neighbors anymore though for a new buyer this can drop their interest drastically, and so the value of the property.
Now many houses on Bonaire have a studio and/or apartment that is rented out and off course any seller would like to capitalize on this income too, this business comes with the house so off course it has value. But how much is it? And can these numbers be trusted, any seller would make the numbers shiny in their advantage wouldn’t they? Well, although there are plenty people that don’t, you do have to pay tourist tax on the island. Asking for proof of pay for the last year (it goes by month) will give a proper reflection of the reality here. If the answer is full of excuses, well, you know the real value of the numbers and rental bit don’t you.
Now depending on how badly the seller wants to sell his real estate he/she might decide to position the house cheaper then the houses it competes with. The desire to sell quickly has an impact on the value of the house too you see. And if there is a lot of real estate on the market, due to such price drops it’s likely the asking prices go down and any new offerings on the real estate market will take these lower prices as a reference. The same also goes the other way off course; if full asking prices are paid again and again, any realtor will try to set the bar a bit higher. Can’t blame them can you?
The rule of thumb is if there is a “sales price” mentioned, this is supposed to be a fixed price. If it is an “asking price”, well, someone is probably open for doing a deal! How to capitalize on that? We would suggest to find out what variables are important to the seller and cater to that with your important variable probably being the purchase price. Like that you can get to a successful win-win situation with happy people on both sides.