The Many Faces of Value

How do you determine the value of something?

We recently sold our house.   The buyer, I think got a good deal and we see value in the freedom to move elsewhere. 

That process of determining value in a sell or buy transaction has been the topic of many cycles of idle thought for me in the last few months.

I suppose your friendly neighborhood free-market-economist accountant would say that the value of something is the relative amount it would fetch in an open transaction.  "Something is only worth what someone will pay for it."

I suppose a philosopher would argue with that stance and say that in order for that assertion to be true no thing would hold value until the time it is sold.   What of human life?  Has no human life held value since slavery?

Does value have to be measured in terms of currency?  What of emotion?

Certainly many of the universe-denting products we all enjoy, like the iPod, enjoy some blend of emotion and value.   Apple fans LOVE their Mac.   Honda fans LOVE their Accord.   (Country music singers call them both yuppies.)

We aren't in any particular hurry to get under another mortgage but we did find a home we LIKED that week.   What a dangerous concept: allowing emotion in a transaction like a house.

I've always found a way to look at the things that I don't love about a negotiably priced item versus those things I do.  If you come to the bargaining table willing to not buy the item at all, it seems to be a much stronger stance than being all googly-eyed and desperate.  But, you have to be willing to walk away.

Take, this house.   Six months ago someone offered $60k more than we did.  

Yet, they aren't in it - now, are they?

Still, as a seller, it would be easier to sit back and say "well, it was worth this amount to one person, I FEEL someone else will come along." 

But as a buyer, I had to remind myself today that a property is only worth what it is worth TO ME - as it sits.. We see homes with tremendous potential, plenty of them.  But, you shouldn't pay for potential and when trading money for any item, it is probably a valuable lesson to keep that things are only worth the sum of their parts in the state they are in.  Irregardless of their cost or your own emotion regarding it. "I FEEL this is worth ..."

I write all this because I found a tremendous amount of liberation in the idea of offering for something what I'm willing to pay for it and not feeling the pressures of comparables and what is deemed fair.  I'm sure I come across on the other side of this like a complete butt or a flake.  The people will likely turn down the offer we sent them. I can live with that.    In the off chance they accept it, I can live with that, too.

Either way, I just gave you the secret to stress-free home-or-car shopping.  That's gotta be worth something, right?

:)