Understanding Market Value
Property value is determined by the existing pool of prospective buyers, based on:
- Location, design, amenities and condition
- Availability of comparable (competing) properties
- Economic conditions that affect property transactions
Factors that have little or no influence on the market value of a house include:
- The price the seller paid originally for the property
- The seller’s expected net proceeds
- The amount spent on improvements
- How urgently the seller needs to purchase another home
Accurate pricing is important because:
- Properties priced within market range generate more showings and offers and sell in a shorter period of time.
- Properties that are priced too high may sell with difficulty and/or take longer to sell.
An impartial evaluation of market activity for similar properties is the most effective way to estimate a property’s potential selling price. A comparative market analysis displays properties that:
- Have sold in the recent past – shows what buyers in this market actually paid for properties similar to yours.
- Are current on the market – shows properties that are competing with your property for the attention of available buyers.
- Failed to sell – shows properties that did not sell, and our understanding of the reasons can help avoid disappointment in marketing your property.
