To understand “fair market value”, you have to look into the meaning of comparable prices. Comparable prices are the major factor that determines the fair market value of a home. When buying a home in a neighborhood the value is determined by recent sales of homes in the same area.
Houses that are similar in size (floor plan) and with similar rooms, for example, a dining room, a kitchen, two bathrooms, a lounge and four bedrooms, is also a factor. The most important factor of the comparable prices is the current market. The value of a property cannot be based on historical data.
How To Price Your Home To Sell
There are more aspects that can influence the market value such as the condition and the location of the property. To get an idea of what to consider, the following list can be of help:
- The proximity to amenities.
- A home with an obstructed view is worth less than a home with a view of mountains, the ocean or a lake.
- Noise polluted area.
- Is the property situated close to busy roads where heavy, continuous streams of motor vehicle traffic occur?
- The condition of the roof and the exterior of the house.
- The interior condition of the walls, window frames, doors, ceiling and plumbing,
- The condition of the electrical compliance.
- The size or square footage of the home.
- The security systems installed.
- A well established garden and swimming pool will add to the value of the property, if that is what the buyer finds appealing.
Tips for Pricing Your Home
Pricing your home doesn’t have to be so technical that you need a real estate degree to do it. Although a qualified realtor would be able to assist you better, here are three tips to help you price your home to sale:
- Don’t Take It Personal – Don’t price your home based on your personal likes, memories made in the home, or even based on the price you paid for it. None of this is relevant to a potential buyer. Their goal is to get into a home, so that they can begin to create their own memories.
- Calculate by Square Footage – You can easily go online to see what the going rate is in your area. Do your own comparisons. Locate homes, similar to yours, that have sold in your area recently. Use the square footage prices to set a basis for your own pricing.
- Make the Terms More Attractive – This may include a shorter escrow time for those wanting to move fast… seller-financing for buyers with cash, but have credit issues… lease option to purchase for potential buyers that need more time to save for their down payment. Creative and flexible selling terms tend to attract more buyers.
Your Real Estate Agent is fully equipped to help you calculate the fair market value of a home. Just remember, they are not in charge. The final word belongs to you, the seller. But, it helps to know what factors help set the fair market values. These tips should help to point you in the right direction to price your home to sell.
Article provided by Allison Klein a Fort Collins CO real estate agent who specializes in many of the local Fort Collins neighborhoods including Old Town Fort Collins real estate and Observatory Village homes for sale.