What is Market Value?

What is Market Value?

Market value is a term you have probably heard tossed around a lot if you have already started your home-buying research. But what exactly does it mean? Market value is the price point that appeals to many buyers, triggering a sale within a reasonable time frame. This time frame is estimated by looking to the average number of days comparable properties in the area were listed for before they sold. For example, if most comparable homes in a certain neighborhood sell within six months, you want to price a property so that buyers will be compelled to make an offer during this time frame and not let it linger on the market for much longer.

It is important to note, market value is not the amount paid for a home or the amount paid for the home plus the cost of all improvements made since the purchase. Rather, market value is primarily determined by the location and size of the property, and secondly by the amenities and condition of the home.

 

A First Step in Determining Market Value

The first thing to do when trying to calculate market value for a home is to research comparable properties and the actual prices they have sold for in the same neighborhood. Please note, this is not the same as looking up what homes are currently listed for in the area. Even if there are no recently sold properties directly comparable in terms of size, you can still create an estimate by calculating the price per square foot of living space. This helps to create a relative way of comparing properties.

Market value can then be adjusted up or down based on a home’s amenities and condition. For example, if the property features a swimming pool, a new roof, a fully-equipped media room, or a sprinkler system, this could provide added value. However, many factors such as climate, regional preferences, and expectations based on the neighborhood will influence whether or not certain features actually add value and by how much.

Please remember to consult your realtor for a final estimate when it comes to the market value for your home. As a local expert, they will be able to provide insight about specific details most likely to influence property values in your neighborhood. Factors such as the proximity of nearby schools, current market demand, and buyer preferences are all important to consider. A seasoned professional will know how to account for this and also have a pulse on current market trends, which may or may not be directly reflected in sales history and statistics for the last six months. In today’s fast-paced market, underestimating the market value for your home could be a costly mistake, so consulting a professional is imperative.

 

Please reach out me if you have any further questions on this topic or need assistance in determing your home’s current market value. I would be happy to help.

 

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