What Does Fair Market Value Have To Do With My Home For Sale?
What Determines the Value of Your Home?
Fair Market Value is the price a willing buyer will pay and a willing seller will accept for a property that has been exposed to the market for a reasonable length of time, where neither party is under duress. In other words, if three other homes exactly like yours (exact same size, condition, and amenities) sold for $475,000 the Fair Market Value of your house would be $475,000. Taking your home beyond the Fair Market Price requires that your home be exceptional in the market and your Real Estate agent savvy enough and prepared with an aggressive marketing plan. But let’s not get ahead of ourselves….
How do you determine Fair Market Value?
A professional agent who has knowledge of the area will determine Fair Market Value by finding sales of properties that are reasonably similar to the property. Here’s a general example: In a subdivision where there are a lot of homes that were built with the same floor plan, it is relatively easy to find “comparable” sales. But hold on! You can run into problems when there are no homes exactly like it (you have that exceptional home, remember?), or there have been no sales of those homes in the last six months to a year. In this case, sales of properties that were similar, but not exact, are used with adjustments for differences in condition, amenities, square footage, and other factors that affect the value. This is where working with a local Real Estate agent makes a difference – their knowledge and expertise of the area will help you, plus they will have the “pulse” of the area.
Let’s take a look at the main factors to consider in determining the value of your property:
LOCATION LOCATION LOCATION
Location is the single most important factor in determining the value of your home.
Prospective buyers compare your property against competing properties. You are competing with every other home that is currently for sale: new and preowned, those listed with agents and those trying to sell themselves, in your area and other areas. Buyers will perceive value based upon properties that have sold or are available in the area.
Property values are affected by the current real estate market. As the real estate market can’t be manipulated, I will use a flexible marketing plan with my sellers that I develop by analyzing the current market conditions and individual features of the property. My “Showing with a Purpose” marketing plan moves quickly on the market with open house scheduling and targeted marketing to expose your new listing to as many potential buyers as we can.
The condition of the property affects the price and speed of the sale. As prospective buyers often make purchases based on emotion, first impressions are very important. Optimizing the physical appearance of your home will maximize the buyer’s perception of value. The key is working with your Real Estate agent to identify those areas and fix them! (Read more about that here: Find the Weakest Point in Your Home and Fix It.) If buyers have a choice of two comparable properties similar in price, guess what? They will choose the one in the best condition.
Pricing your home properly from the beginning is an important factor in determining the length of time it will take to sell your home, and honestly, something I do not recommend you do on your own. There are many nuances in a market area that will affect pricing, there are more ways than one to skin that cat! When I sit down with my seller, we will look at them all – reviewing the home marketing plan, and using my knowledge of the area to determine the best possible asking price.
Getting your home ready to sell is more than brushing a new coat of paint on the front door! When you are ready to sell your home, I would like to visit with you about the market and the unique features of your home, that if marketed aggressively, can get you top dollar. Call me at 972-612-9620, I look forward to talking to you personally!