Often residential home sales is far more subjective than scientific. This can drive some people batty -- and some Realtors escape into commercial real estate where formulas and price per square foot gives black and white answers. Also there tends to be far less human drama in commercial sales.
But, back to residential. What is fair market value? Fair market value is an agreed upon price that a reasonable seller and a reasonable buyer can agree on. Vague enough for you? There are so many variables in selling a home; location, design, utility, proximity to amenities, privacy, landscaping, size, age, area, school zone, recreation, airport distance....I could go on. What is important to one buyer or seller is not important to another. A good Realtor will study comparables; but even this is not an accurate indicator of the end sale price.
Also, even if a buyer falls in love with an overprice property and is willing to pay too much for it, the bank has no emotional attachment and can simply refuse to finance the asking price. So we come full circle to that key word: "reasonable." Sellers and buyers have to have some grounded reasonableness in their assessment of value.
I do pity the analyzers of this world when it comes to buying a home! They want to know if its better to buy with or without a suite, with septic or sewer, in town or out of town, new or used, one level or two for the best investment. You might imagine that phrases like, "it really depends," do nothing to satisfy the spreadsheet!
Often when people are twisting about meeting an asking price a Don Henley song lyric runs through my head, "how bad do you want it?" And if they don't pony up the answer is clear, "not bad enough."
At the end of the day it is not Realtors, Assessors, Appraisers or experts that determine the ups and downs in a market; it is you, the consumer.
Clear as mud?! Welcome to the world of Real Estate where our job it to get sellers the most money for their home and buyers the best value for their dollar all the while witnessing the market hinging on the vagaries of the population at large!
But, back to residential. What is fair market value? Fair market value is an agreed upon price that a reasonable seller and a reasonable buyer can agree on. Vague enough for you? There are so many variables in selling a home; location, design, utility, proximity to amenities, privacy, landscaping, size, age, area, school zone, recreation, airport distance....I could go on. What is important to one buyer or seller is not important to another. A good Realtor will study comparables; but even this is not an accurate indicator of the end sale price.
Also, even if a buyer falls in love with an overprice property and is willing to pay too much for it, the bank has no emotional attachment and can simply refuse to finance the asking price. So we come full circle to that key word: "reasonable." Sellers and buyers have to have some grounded reasonableness in their assessment of value.
I do pity the analyzers of this world when it comes to buying a home! They want to know if its better to buy with or without a suite, with septic or sewer, in town or out of town, new or used, one level or two for the best investment. You might imagine that phrases like, "it really depends," do nothing to satisfy the spreadsheet!
Often when people are twisting about meeting an asking price a Don Henley song lyric runs through my head, "how bad do you want it?" And if they don't pony up the answer is clear, "not bad enough."
At the end of the day it is not Realtors, Assessors, Appraisers or experts that determine the ups and downs in a market; it is you, the consumer.
Clear as mud?! Welcome to the world of Real Estate where our job it to get sellers the most money for their home and buyers the best value for their dollar all the while witnessing the market hinging on the vagaries of the population at large!
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