The value of a property and how much you should pay to purchase it is a very personal thing in this market. Let me try to explain what I mean by this.
I had a conversation with a local Barbadian house keeper recently who lives on the beach on the west coast with her family. Her house is simple and not large with just enough room for now. The small piece of land with hardly any yard where she lives however could probably fetch over $5M Bds. Selling her property would allow her three children to each have a comfortable home of their own, her grand children to go to university and she herself to retire to a peaceful country home with some land where she could raise a few chickens and goats and retire as she would like with no more financial worries.
She cannot afford to insure her home and while living near the sea is pleasant it does increase the ware and tare on the property.
Her modest house has little value but the location of her land means that selling it could change her family’s future for generations to come.
Her land was given to her grandfather many years ago by his employers as the location had little value to them for farming or other commercial use.
That same piece of land has little value to her other than it being where her modest house is located which happens to be on the sea. However, a wealthy overseas client would pay handsomely to be able to build their dream holiday home on that same piece of land by the sea.
Should she sell the land? (This raises questions regarding selling off our limited beach land to foreigners which is another topic we encourage you to comment on, but for the purpose of this article we will stay with the question of value) How can 2 people value the same piece of land so differently? To her cousin who has half an acre with animals in the country her land could not be worth a quarter of what his is worth.
So who’s value is more accurate?
Hopefully this example clearly explains how value can vary so drastically depending on the personal situation and therefore the opinion of the person you are asking. A gallon of water is worth more than a ton of gold in the desert when you are thirsty and water is scarce.
My point here is that you should clearly establish what your needs are and ensure that the property you are looking for services your needs accurately and in the best fashion possible. How you value a property is going to be guided by how close that property is to filling your needs and wants and these will differ in varying degrees between various people including the current owner whose needs and wants have also changed resulting in them now looking to dispose of their property.
Make sure you clearly understand what your real needs and wants are and if necessary get some help in identifying what these are and where to start looking to meet them. Understanding these needs and wants and prioritizing them will help you to understand how valuable a particular property is when you view it and how it compares to others that may at first appear to be similar.
Feel free to share your thoughts on what we have shared here whether you are in agreement or not with our suggestions.
David A Coombes
