How Market Value is Determined
There is no doubt that many factors go into determining the ultimate market value of a given piece of real estate. Although - thankfully - not as a volatile as the stock market, the same supply and demand factors that influence the price of a given stock on a given day in many respects similarly affect the fair market value of a home on a given day or during a given finite period of time. Below, you will find a summarization of the various factors that determine the fair market value of real estate. The most important section is the first section, which is entitled "The Market Value of Your Home is Not." Here we see the issues that so often influence sellers to make bad decisions with regard to pricing their homes. You may review this list and feel that the items are of a common sense nature. And, for the most part, you are correct. However, we frequently hear people talk about "the amount for which their home appraised," or, "the amount for which their home is assessed" as if those measures were the real determinants of price. We wish it were that simple, but it isn't. Selecting a true real estate professional that understands how to properly price your home is one of the most important and critical decisions that you can make. We hope that do the appropriate research and that you make that decision wisely!
The Market Value of Your Home Is Not:
- What you have in it
- What you need out of it
- What you want
- What it appraised for
- What you heard your neighbor's house sold for
- What your assessed value suggests that it is
- How much it is insured for
- Based on memories and treasures
- Based on prices of homes where you are moving
The True Market Value of Your Home Is:
What a buyer is willing to pay for the property
- Based on today's market
- Based on today's competition
- Based on today's financing
- Based on today's economic condition
- Based on the buyer's perception of condition
- Based on location
- Based on normal marketing time
Properties That Sell In Today's Market:
0n a scale of 1 to 10, the "10's" are the ones that are selling; how can your property be a "10"?
- By improving the condition dramatically
- By offering good terms
- By improving the way the home shows
- By adjusting the price