Demand: There is supply and buyers willing and able to purchase the inventory. Opportunity.
Rarity: When there is a limited supply property in particular locations and more buyers want this type, there may still be more demand. Missed sales if the inventory is sold out.
Condition: Affects the demand. If there is a lot of work needed for the property to be in demand, the price needs to be low enough to enable the buyer to pay for repairs and not be paying over the market price. No sale if price is not right.
Buying and selling real estate in Mexico is similar to the closing process in Europe and South American countries: A notary (specialized attorney appointed for life) is empowered to transfer real estate. Using a notary for closing is different from US and Canadian transactions. The notary in most of the world is the highly trained and paid professional we use here in Mexico. A notary public in our experience is not by any means the same profession; even though the names are the same.
Those of us living in Mexico who are from other parts of North America probably take the concept of fair market value for granted. We assume that this measure of value is used in other markets and other countries. Actually, it is not common outside of the USA or Canada to have sold market data. In order to have information about sales prices and to adjust for differences in properties; data needs to be available. If we start out with the objective to have fair market value, where, do we as consumers normally go? There are no websites as in Canada and the USA such as Zillow and Trulia offering a large number of properties for sale as well as average sales prices by areas.
Real estate is a highly emotive asset in most cultures. ‘Irrational exuberance’ in property markets can cause prices to move away from fundamentals. Buyers move away from markets when negative press reports are released. The truth or vetting of what happened, is not necessary. Unfortunately, emotional reactions trump logic. Real estate markets suffer from a greater degree of misinformation than stock markets. In real estate, no two assets are the same.