Definition: The most probable price in cash, terms equivalent to cash, or in other precisely defined terms, for which the evaluated property would sell in a competitive market under all conditions requisite to a fair sale, with the buyer and seller acting prudently, knowledgeably, and for self-interest and assuming that neither is under “undue duress.”
What affects the market value of a home?
- Size of house and lot
- Interest rates
- Prices of recently sold properties
- Competing properties
What does not affect the current value?
- Original price
- Needed proceeds
- Wanted proceeds
- Cost to rebuild today
- Personal opinions of family, friends or neighbors
Value is determined by what a Buyer is willing to pay and a Seller is willing to accept in today’s market. Buyers should make their pricing decisions based on comparing a property to other properties sold in the area.
Making an offer
Everyone wants to get a deal, however the strategy of making an offer involves more than just throwing a price out to the seller, hoping they will accept it. First and foremost, if you want the negotiations to be successful, you want to submit a reasonable offer that the seller will be willing to work with. Starting off with an offer that is too low could offend the seller and halt any further negotiations. It is also important to remember that sellers all have different motivations for selling, and are all in different financial positions – all of which can affect what they may be willing, or able, to accept for their property. When submitting an offer you should take into consideration the condition and location of a property, as well as the current market value for the neighborhood.
Each property and circumstance is different, but a strategic negotiation plan, along with realistic expectations, can result in a successful purchase!