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Determining Fair Market Value
For
most people their home is their most valuable asset and the sale of a home
is usually the largest single financial transaction that most people
undertake in their lifetime! When
it comes time to sell - they will have two competing factors: Emotions and Reality.
As cold as it may sound, we need to choose Reality. When considering the market value of a home, we must confront
the following circumstances that we have no ability to change:
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Physical
Qualities (of the real estate)
Location
Age
Size of house and lot
Market
Conditions
Interest rates and financing availability
Buyer demand
Prices of recently sold properties
Economic conditions nationwide and locally
Seasonal demand
The
Competition
The number of similar properties for sale
Their prices, financing terms, locations and physical condition
Factors
that have 'no bearing' on Market Value of real estate
The amount of cash you want or need from the sale
What people say your property is worth
Your innovation and urgency to sell
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The
most effective way to get TOP DOLLAR for your home is with the help of a
professional trained to work with the ever-changing real estate market
conditions. Those market
conditions and data are combined with your specific goals to complete a
customized marketing plan and a realistic time-frame is established for the
completion of the sale. One of
the most effective tools used in pricing real estate is the Competitive
Market Analysis.
What
is a Competitive Market Analysis?
A Competitive Market Analysis will help you determine what the buyer should
be willing to pay for your property, based upon past sales and present
competition.
A Market Analysis is NOT an Appraisal.
A
Competitive Market Analysis (CMA) may or may not agree with an appraisal. An
appraisal for a specific reason, i.e. refinance, divorce, probate is based
primarily upon brick, mortar and statistics. Beyond
appraisal, a CMA analyzes the market, the economy and the competition. The
seller and the broker, review the information available, and price the
property competitively. It is
the agents' role to educate the seller and execute an effective marketing
program. It is the seller's role to price their property and prepare it
for the market.
The
following items are taken into account when completing a CMA:
When you choose a
listing price, be able to justify your decision.
If a buyer agrees to your price and the appraiser disagrees,
we'll have to try to defend our position. That is why pricing is so
critical. A competent REALTOR®
will present information, discuss options and strategies, and assist in
creation of a marketing program.
A competent REALTOR® will also require that the pricing strategy be based
upon fact rather than fantasy. Whichever
price you select, be certain that you have documentation to support your
listing price. It is our job to educate you regarding pricing and property enhancements,
and to market your property to its best advantage.Your job is to price your property competitively and to
make every effort to present the property in its best possible condition.
©Copyright 2008 Brenda Jones Real Estate
Licensed in the State of Vermont |