Are properties really selling over market value?

[Mark K]

...(an example comes to mind from this morning's news...Colonial Pipeline paid $4.4million in ransom...that situation, while still a choice, would likely be accurately characterized as a buyer acting under undue stimulus)

But they didn't HAVE to pay it. They freely chose to pay it.

According to some, any choice freely made cannot, by definition, be subject to undue stimulus.

 

[TerryRohrer]

But they didn't HAVE to pay it. They freely chose to pay it.

According to some, any choice freely made cannot, by definition, be subject to undue stimulus.

Sure, I agree, but they certainly would not be characterized as typically motivated. But, I'm more interested in your examples of when a buyer "has" to buy, as that seems to be your arguement.

 

[J Grant]

But they didn't HAVE to pay it. They freely chose to pay it.

According to some, any choice freely made cannot, by definition, be subject to undue stimulus.

Agree but...technically ( hate to be a pest )
The choice is not being analyses for undue stimulus, the price as a result of that choice is .

It is very simple, the MV definition assumes a PRICE unaffected by undue stimulus. The reasons and motivations for the price is a different step of analysis.

 

[J Grant]

Sure, I agree, but they certainly would not be characterized as typically motivated. But, I'm more interested in your examples of when a buyer "has" to buy, as that seems to be your arguement.

The buyer does not have to buy. But the buyer is buying under extreme time pressure or pressure against other offers...which could result in a price affected by the undue stimulus of that pressure.

Given that all the other buyers are under pressure, we still have to analyze a price.

 

[Mark K]

Say it however you want, the argument still amounts to saying the market conditions are prompting people to enter into transactions they wouldn't otherwise choose to enter into.

That's exactly what is happening. A rational real estate market does not act the way the current market is acting. Something is causing the irrationality. I chose to call it undue stimulus. Call it whatever you want. You can even try to convince some people that the current market is historically rational; some might believe you.

 

[J Grant]

But they didn't HAVE to pay it. They freely chose to pay it.

According to some, any choice freely made cannot, by definition, be subject to undue stimulus.

Exactly- why the MV definition includes undue stimulus because it recognizes it can happen even when there is a choice

Which is why undue stimulus is not seen in the LV or DV value definitions, which have compulsion instead (lack of choice )

 

[Mark K]

Sure, I agree, but they certainly would not be characterized as typically motivated. But, I'm more interested in your examples of when a buyer "has" to buy, as that seems to be your arguement.

Its not what I think that counts. The buyers are the ones that believe that they 'have' to buy; that's all that matters. They are making this crazy market. They are not typically motivated, much like the gas company. So what causes this atypical motivation if its not some stimulus, maybe even an undue one.

But, job transferees, the lack of available rentals, divorces, etc. are examples of situations where a buyer would 'have' to buy a home. It happens.

 

[TerryRohrer]

The buyer does not have to buy. But the buyer is buying under extreme time pressure or pressure against other offers...which could result in a price affected by the undue stimulus of that pressure.

Given that all the other buyers are under pressure, we still have to analyze a price.

I don't buy the argument that a buyer is under pressure to buy. I have purchased property before. I am not actively pursuing the purchase of any property now. Why is anyone else under more pressure than I, except that they are childishly pursuing what they want when they want it. That is not undue stimulus...that is petulance!

 

[TerryRohrer]

Its not what I think that counts. The buyers are the ones that believe that they 'have' to buy; that's all that matters. They are making this crazy market. They are not typically motivated, much like the gas company.

But, job transferees, the lack of available rentals, divorces, etc. are examples of situations where a buyer would 'have' to buy a home. It happens.

Everything you just cited is a choice. There isn't a job they have to take. They don't have to live in any one place. Those are all examples of people doing as they choose. That is not undue stimulus, that is free will.

 

[Alsie35]

This thread is rapidly spiraling downward ...