Understanding Market Value
Market-sensitive pricing can be the key to maximum market exposure and ultimately, a satisfactory sale. Establishing the best listing price up front will result in the best selling price.
The existing pool of prospective buyers determines a property’s value, based on:
- Location, design, amenities and condition
- Availability of competing properties
- Economic conditions that affect real property transactions
Factors that have little or no influence on the market value of a house include:
- The price the seller originally paid for the property.
- The seller’s expected net proceeds.
- The amount spent on improvements.
A Competitive Market Analysis considers properties similar to yours that:
Have sold in the recent past
This shows us what buyers in this market have actually paid for properties similar to yours.
Are currently on the market
These are properties that will be competing with yours for the attention of available buyers.
Failed to sell
Understanding why these properties did not sell can help avoid disappointment in the marketing of your property.
An impartial evaluation of market activity is the most effective way to estimate a property’s potential selling price. A general rule of thumb to keep in mind is that a prudent person will pay no more for a property than it would cost to purchase a comparable substitute.