What is Market Value?
Market value refers to the price that a seller of real property can expect to receive from a buyer in a fair and open negotiation. Typically, the market value of a home or other real property, such as land, is determined by professional appraisers or real estate agents and is based on a variety of key factors. Especially in tumultuous markets, this price can flucutate dramatically, and while your real estate professional may determine one "market value" for your house, the reality in the end is that the true value is determined by what a buyer is willing to pay for it.
Knowing the market value of your property is important if you are selling your home because it helps determine the asking price. Many sellers who do not understand this concept will price their home too high or too low, both of which could have negative financial results. Similarly, many homeowners fall victim to predatory lending when a lender convinces them to borrow more money than their home is actually worth.
A professional appraiser or real estate agent determines the market value of a home by first comparing other similar properties that have recently sold in your area. This is what real estate professionals refer to as "comparables". They try to locate homes as similar in size and style to your own that have sold in the previous six months to one year. They will also determine the average price per square foot the homes in your area are commanding. While this process alone does not determine the market value of a home, it provides a solid base price for determining a reasonable asking price.
Other factors that will affect market value slightly are improvements to and the condition of the property. Updates to kitchens and baths are the primary improvements to a home that will increase its selling price. Cosmetic updates, such as fresh paint, new carpet, new light fixtures, and window treatments, will definitely help a house show better, but do not improve the overall value. The condition of the property does affect the overall value though. A home with well-maintained or newer mechanical systems, windows, roof, and entry doors will command a higher price than one with outdated mechanics or faulty structures.
If you would like to know the market value of your home, many real estate agents will provide a basic appraisal for free in hopes that you will employ their services when the time comes for you to sell. However, you can also determine a reasonable assessment on your own by gaining access to your county's public real estate tax records. Many counties have online databases for public records that you can search to gather pertinent information to determine a ballpark figure. However, if you are considering selling your home, it is best to get two to three professional opinions on the value of your home before you list it.
This is all very solid advice. It's best to not only offer a buyer the best quantitative value, but in a market as we've seen for the past two years, selling price is the trick.
The real estate market has been nothing short of turbulent and the CMA process has been a doozy. You can always refer to the National Association of Realtors median home sales map, follow indices such as Sell My Home and Zillow for data tracking purposes, or simply by checking out your local open houses.
The point is that if you are serious about selling quickly, you're going to have to beat the next seller by price. Exercising due diligence is a must and pricing it right is the way to get the deal done.
I would like to use my 401(k) to use for a down payment on a rental. I have been out of work for some time and want to know how does an investor get capital when in a position like mine? I know that credit is a factor and income but is there any other alternative that people are using?
What do I say if am asked to explain the method of calculation of market value of about 5 years old Textile Machinery for fixing some insured adequately for material damage insurance coverage.
while a realtor or appraiser may not dictate the market price of a property, sellers must go to a professional to help them determine what is a fair price to sell their house at. if they're good, the real estate professional isn't just grabbing a price out of the air, they're using comps, tax records, etc. to get as close as possible to what the market value ends up being. sure, the market value isn't actually "revealed" until the house actually sells, but until then, a seller has to estimate what that market value will be.
An appraiser does not set the market value of a home. The market value of a home is only what someone is willing to pay for the property in a particular market. There are various types of appraisals, all yielding very different values. However, no type of appraisal actually determines the market value of the property.
In this very slow 2008 housing market, homes are now selling for tens of thousands to hundreds of thousands of dollars less than "appraisal", tax value, and/or mortgage value. This fact is very hard for sellers (and Realtors) to swallow.
The longer a property is on market in this housing crisis, the more of a loss the seller will be forced to take. Most sellers and realtors don't understand the severity of the current housing market, so thousands of properties are sitting on the market for months to years with no shows, no offers, and no prospect for sale.
We're seeing $500K houses that are being reduced by $200K, and they're still not selling. Unfortunately, the housing market has not bottomed out yet, and it will not do so for several years to come. Realtors are giving their clients false hope by telling sellers if they sit on their nest egg for just a bit longer, they can get their price. That's not going to happen, and the seller may face financial ruin during that nesting process.
Sellers, if you need to sell, start slashing the prices now, as the road to recovery will be long and slow.
I am an ex employee who's been trying to get her ESOP funds for 7 years. The "company" continues to push out my withdrawal date. What can I do?
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