Determining Property Value
The market approach is based on the premise that a prudent person will pay no more for a property than it would cost to purchase a comparable substitute.
Competitive Listing and Sale Prices: to form an opinion of value, a Real Estate Professional will analyze current listings and sale prices of similar homes in your area. He or she will consider properties that have recently sold, are currently for sale, or were offered for sale but did not sell. Although none of these properties is identical to yours, only those that have a high degree of similarity are noted in this report.
Comparative Evaluation: a Real Estate Professional can prepare a detailed description of your property and an estimate of the selling price range in today's market. This is known as the comparative or competitive market value of property.
Staying Current with Market Value
Once your property has been listed, your Real Estate Professional will continually collect and review updated information to monitor the offering price. Our observations may include:
- Professional opinions.
- Industry (broker) response.
- Buyer reaction.
- Current market conditions.
- Competing properties.
- Availability of financing.
- Number of showings.
- Length of time on the market.
- Interest rates.
- Condition of the property.
- Seller motivation.
Factors that Do Not Affect a Property's Value
What the owners paid when they built or bought the property. Some of the improvements and upgrades the owners have made to the property. The cash proceeds the owners want or need from the transaction. What friends, neighbors, or relatives say a property is worth.
Factors that Do Affect a Property's Value
- Style, condition, age, decor.
- Time of year.
- Property and neighborhood.
- How quickly seller needs to sell.
- Competitive Pricing: The Pricing of Choice
- The probability of receiving an acceptable offer on your property and completing a sale diminishes significantly when your asking price is higher than the current market value.
Here are the factors that will determine price range:
Your property: its strongest selling points.
The competition: the asking prices of other homes for sale in your area.
Successful sales: the actual sales prices of home in your area.
The expired listings: homes offered for sale that did not sell.