25 Sep 2018
Market value is a term realtors and appraisers use often. However, like with most professions, we sometimes forget that not everyone communicates in the same jargon we do every day. The term "market value" is sometimes confusing when we meet with sellers to discuss the ideal price for their property to get it sold in a reasonable amount of time.
Market value is what a ready, willing, and able buyer who is not under duress will pay for a property.
Most buyers these days are very well educated and have access to tremendous amounts of information about properties thanks to the worldwide web as well as so many documents and maps being online for easy access. Sellers and their agents simply must do their homework in regards to how they position their property in regards to the market conditions.
In my opinion, the worst thing a seller can do is overprice their property, have it sit on the market, let the property get stale, and create a negative history in the multiple listing database. What most sellers do not realize is that the history created in the multiple listing never goes away. Buyers and their agents can very easily search how long a property has been listed, exactly what and when price reductions took place, as well as how many times it has been listed with various agencies. A long “unsold” history can have a very big negative impact on the seller’s ability to sell at all.
The buyer’s first question is usually, “What’s wrong with it?”
If "what's wrong" is that the property has been consistently overpriced, then chances are when it does sell it may have taken more of a price beating than it should have had it been evaluated properly and the seller had been reasonable in the beginning.
Market value is not what a seller wants for a property. Market value is also not what they need to do with the proceeds. A hard discussion to have is to truly get some sellers to understand that emotion is a large part of them selling, but the buyers are (for the most part) very unemotional. It really is a business decision and price must have some strong basis of support.
If you live in a very homogenous area, pricing a home may not be very difficult. The harder properties to price are the unique homes or homes on unique parcels of land. It is incumbent upon the realtor helping the homeowner pull together as much information as possible about any “sold” like-kind properties as well as any suitable “active” like-kind properties.
The sold properties made it through the process and are closed. The actives are the competition.
|Post courtesy of Terri Seignious, Akers Ellis real estate agent|
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