Fair market value can best be described as the higher price estimated in terms of money which the property will bring when the property is exposed for sale in the open market by a willing seller, allowing time to find a willing buyer, buyer or seller acting under compulsion, both facing full knowledge of all the uses and purposes to which their property is adapted and for which is capable of being used.
The values of your home is determined by what a buyer is willing to pay in today's market based on comparing your home to others currently on the market for sale. Market value does not take into account the amount you paid for your home, costs of improvements, the amount of cash you need from the sale or out-dated appraisals.
This market value definition presupposes perfect knowledge on the part of the buyer and seller. Since this perfect world rarely exists, our estimate of price is generally indicated as a range.
In evaluating your property, Realtors use many of the tools that a professional appraiser utilizes: comparable sales, competitive listings in escrow, square footage, location, amenities, and the general condition of the property. The existing financing on the property, is also a consideration.
The current market in your area must be considered when determining an asking price
▫ By researching current listings, we can understand the competition.
▫ By examining recent sales, we can determine realistic selling prices.
▫ By looking at failed listings, we can evaluate the factors that prevented their sales.
How price will affect the sale of your property
▫ As the price of a home rises, the number of potential buyers becomes smaller.
▫ A home priced high, relative to the market, takes longer to sell (if it sells at all).
▫ A home priced high, relative to the market, gets fewer showings.
▫ A home priced high, relative to yours, will help to sell your home (and vice versa).
A home, correctly priced, takes maximum advantage of the attention focused on your property during the first two weeks of a listing. It is during this time when the greatest number of agents and qualified buyers will view a property.