…make up your mind about the price.
What does firm price or best offer even mean?
“OK, I’ll pay $7500 or $6800, you decide”???
…make up your mind about the price.
They mean best offer above the asking price.
They want people to offer more than the asking price…good luck with that. The same thing is even happening with rentals now…people are bidding more than the asking monthly rent in some areas (fortunately not in the city where I live). It’s really a joke these days…people with more money than common sense, wrecking the market for the rest of us who simply cannot afford to pay crazy high prices.
It’s a fair system. Bidding at an auction is the most fair way to set a price. As demand increases, prices go up. This motivates suppliers to produce more. Then the situation corrects.
However this fair market system breaks down and develops problems when people with money from bank loans enter the buyers’ market. They’re bidding up rices with money that they didn’t earn and don’t have saved. The money that they’re using to buy financed things with is created out of nothing when the bank issues the loan. This creates more money in the system and inflation. The proposed vacancy tax, where the owners of empty properties that could be rented out to people are basically fined, is meant to adress part of the problem that this creates. With money created out of thin air being used to bid up the prices of real estate, investers buy with the sole purpose of selling the property at a higher price somewhat later. The profit from this is more lucrative than profit from rental income, so they can’t be bothered to rent it out. These empty properties further reduce the supply of available rental housing, increasing the need for renters to have to bid above asking rent to find a place.
Price gouging is really not an issue. The problem is what I call supply gouging. What I mean is deliberatly reducing the supply of a product to a bit below the volume that the buying market needs. The lumber shortage, which directly affects real estate is a perfect example of this. With supply gouging in place, or a legitimate shortage due to an unforseen situation, retailers now have two options. They can raise prices to keep products on the shelves and ensure availability to those who really need it. If they do this, they get accused of price gouging by the media. The other option is to keep prices low. The products will sell out immedately, and a lot of products will go to people who buy a larger quantitiy than usual to make sure that their supply lasts. With no price increase, there is no penalty for them to do this. We saw this with the toilet paper shortage. Retailers were not allowed to raise prices. There was also no real rationing system in place. The people who got in first bought extra toilet paper and let it sit in their homes for months before they used it. They’re the hoarders, and there was nothing in place to prevent hoarding. Those who came in later didn’t get any. Those who got in first could also resell the toilet paper at a higher price if they wanted. Forcing stores to not raise prices because of “price gouging” was really not the solution to the problem. It’s what the media wanted people to see. The real issue is supply gouging going on behind the scenes. I say let stores sell producs at as high as a price as they like, so long as the volume of product that they are selling is not below normal for the time of year. That ensures that supply gouging is not going on.
Supply gouging is going on right now with the auto makers. They say they can’t get parts, but they’re making a ton of money by letting this “problem” go on. Unlike toilet paper, it’s not really possible to enforce what they call “price gouging” with cars unless a government run rationing system is put in to place that would prevent people who get in first from reselling the vehicles at a higher price.
I have also done this, but I do not leave room for interpretation. I say, “The price is Firm or Best Price over Ask.” Some items are so popular that someone is willing to pay over ask to insure it does not get sold to a friend who is only offering the ask price…
When I sold my last house, three families were interested in it, and there was a bidding war. I sold it for $4,500 more than ask to the second highest bidder because they had 50% cash down and only needed to finance half the cost. The highest bidder offered $5,000 over ask but was financing almost all of it. I did not want to risk losing a sure thing (the middle bidder) if the high bidder was turned down by the bank.
What do you think of using OBO? I heard it means Or Best Offer and Or Better Offer at the same time!
OBO (Or Best Offer) is too ambiguous, very easily could mean I want X dollars, but will take the best offer I’m given…
From personal experience all you have to do is say car is for sale. Don’t have to list a firm price. Last vehicle we listed to sell I was offered anywhere from $200 to $4000 for a 1996 Honda Accord with over 300k miles on it. Ended up giving it to a relative.
@LoudThunder When a car is advertised at $xxxx or OBOe, I’ll take the OBOe. I manage a small chamber orchestra and our OBOe player became too sick to play just before our concert. I really had to scramble to find substitute OBOe player. Cars may be in short supply, but OBOe players are really scarce.
I think “OBOe” players are scarce because it looks like you are blowing into a straw… Also, when I was back in grade school (1950’s) when the music teacher was looking for kids to play one, the boys said, “Jeeze, if I wanted to get beat up, I’ll take up the violin…”
Which explains why there may be as many as 30 violins in an orchestra, but only 2 or 3 oboes.
And that is my “best offer…”
(This is all for fun, a play on words, right?)
Great explanation, though I’m not sure about the last paragraph, “Supply gouging is going on right now with the auto makers.”
Did you see the pictures of the parking lots filled with Ford trucks last year that are waiting to be sold because they are missing some parts? Whether the auto maker or a limiting the supply of new vehicles or some part supplier like a semiconductor maker is causing it, the end result is the same. The amount of available new vehicles is limited. If any of this is happening intentionally, I call it “supply gouging”.