Determining Fair Market Price

Determining “Fair Market Value”

 How to determine “fair market value” is a common concern for our customers. In fact, it is the most important decision you will make as a private seller. 

Do not take this decision lightly.

Fortunately, you have several options to help you with that decision. Listed below are the options that you have to determine your asking price. You can ask any price you want; however, financial institutions make loans based on the sales price or appraised value - whichever is lowest.

 Price it right, maximize exposure

to buyers and it will sell.

1. Do your own homework.

     COST TO SELLER: Free

This approach involves some work on your part. Simply research the neighborhood or area you live in to find out what homes have actually sold and for how much. CAUTION: Do not use “listed price” as a comparison, only use actual SOLD prices. Ask your neighbors what homes have sold, and for how much (they may know more than you think). Compare the prices of sold homes in your area to your home, and make “adjustments” for any differences such as number of bedrooms, baths or garages, no basement, etc.

WARNING: IT IS VERY HARD FOR A SELLER TO BE OBJECTIVE!

 2. Real estate agent Comparative Market Analysis (CMA).

      COST TO SELLER: Free

This approach to pricing is also a sales gimmick used by agents to talk you into listing your property with them.  However, because it is free, you might as well take advantage of it as long as you can put up with the “hard sell” and pressure that you’ll get from agents wanting you to list your property with them, for a commission. Basically what these agents will do is run your address through a computer to determine what homes have sold through the Multiple Listing Service (MLS) in your area. They’ll then compare the “solds” to your property and come up with a suggested price range. For example, they may say your home’s current market value is between the ranges of $200,000 and $210,000. Depending on the motivation of the agents, you’ll probably get a wide variety of ranges ... some will provide you with low ranges thinking they could sell your home at this low price and they could make a fast commission. Other agents will tell you very high ranges in hopes of making you believe that you can make substantially more profit selling through them than you could on your own - unfortunately, this never works!

WARNING: MOST AGENTS HAVE AN AGENDA TO GET YOUR LISTING AND IT IS VERY HARD FOR THEM TO BE OBJECTIVE, TOO!