Yesterday’s Purchase Price Doesn’t Determine Today’s Market Value
Written by Devone Richard
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“But I Paid $900,000 for It.”
I hear this all the time.
“I paid $900,000 for this house. I’m not selling it for $850,000.”
Okay.
But here’s the uncomfortable question:
What does what you paid have to do with what a buyer will pay today?
The market doesn’t know your purchase price.
It doesn’t know your mortgage balance.
It doesn’t know how much cash you put down.
And it definitely doesn’t care how much money you need to walk away with.
Your purchase price is part of your financial history.
It is not a guarantee of today’s market value.
REAL ESTATE DOESN’T COME WITH A GUARANTEED PROFIT
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Some homeowners believe buying a house automatically means:
Purchase price + time = profit.
Real estate doesn’t work that way.
Markets move.
Neighborhoods change.
Interest rates change.
Inventory changes.
Buyer demand changes.
You could buy for $800,000 and eventually sell for $1 million.
You could also buy for $800,000 and discover today’s buyers only see $750,000 worth of value.
Ownership doesn’t guarantee appreciation.
THE BUYER ISN’T RESPONSIBLE FOR YOUR BAD PURCHASE
Let’s make this one hurt a little.
You bought at the top of the market.
You got into a bidding war.
You offered $75,000 over asking.
You waived everything.
You had to have the house.
Now you’re selling three years later and telling buyers:
“I can’t take less than what I paid.”
Why is that their problem?
The next buyer isn’t responsible for fixing yesterday’s decision.
If you overpaid, the market doesn’t owe you a bailout.
That’s harsh.
But it’s true.
WHAT YOU OWE DOESN’T DETERMINE WHAT IT’S WORTH
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Here’s another one:
“I owe $700,000, so I need at least $850,000.”
No.
You may need $850,000.
That doesn’t mean the property is worth $850,000.
Your mortgage balance is between you and your lender.
Your desired profit is between you and your bank account.
The buyer is looking at the house.
Need and value are two completely different numbers.
REALTORS: STOP DOING BAD MATH TO MAKE SELLERS HAPPY
Seller paid $1 million.
Comps support $900,000.
Seller says:
“I’m not taking a loss.”
Then some Realtor starts searching farther away, going further back in time and grabbing questionable comps until they can manufacture $1 million.
Stop it.
Our job isn’t to reverse-engineer a price because that’s the number the seller needs.
Our job is to tell them what the evidence says.
Sometimes that’s good news.
Sometimes it isn’t.
That’s why they hired a professional.
THE MARKET STARTS TODAY
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The buyer walking into your house today doesn’t care that you bought it for $600,000.
They’re asking:
What else can I buy for $900,000 today?
That’s your competition.
If another house has a better kitchen, larger yard, better location and costs less…
Your old purchase price isn’t going to save you.
The buyer will simply buy the other house.
FINAL THOUGHT
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Real estate can be an incredible wealth-building tool.
But that doesn’t mean every property makes money every time someone sells it.
Sometimes you make $300,000.
Sometimes you break even.
Sometimes you lose money.
That’s investing.
So when your Realtor shows you the market data, don’t respond with:
“But that’s less than I paid.”
Your Realtor can’t change the market because you don’t like the answer.
And neither can the buyer.
What you paid tells me what the house was worth to you then.
What someone will pay tells me what it’s worth today.
Those are not always the same number.
The market doesn’t care what you paid.
And eventually…
The market gets the final vote.
Written by Devone Richard
Broker/Owner | OYT Real Estate
California Broker #01857383
Nevada Broker #1002115
📞 626-500-1212 | 702-941-0202
🌐 OYTRealEstate.com