What is the “Kelley Blue Book” price?
Let’s say you are looking to buy a house. You find one in a neighborhood you like, and you know how much the seller is offering to sell it for — its “listing price.” You’d like your broker’s help figuring out what that house is “worth” — what a fair price would be for that particular house. So you ask your broker to research what similar houses in that neighborhood have sold for recently. Suppose your broker came back and said, “Here is a list of comparable houses and what their listing prices were.” “Well,” you respond, “that is mildly interesting, but what I need to know is what they sold for. Most likely none of those sellers got their asking price. Only if I know that actual transaction price for the other houses will I have some idea of what a fair price is for the house I want.” This concept may seem self-evident. But if it is, why do consumers forget all about it when they go shopping for a used car? Here is what frequently happens. You find a used car you are interested in on
