Seeing that we realtors can't pinpoint an exact price on a house, (in fairness we don't know whose out shopping, how many parties may bid on house and we work for the sellers and sometimes are convinced for a period of time that they're price is "correct"---we default to "market value/range of value".
At the end of the day, the goal is to keep that range as tight as possible, unless we've priced at 999k and get lucky and sell for 1.3 million.
You should know that a few things make the calculation and arrival at market value more meaningful in most cases.
1. what have recent comps sold for?
2. how can you time adjust and adjust differences from one house to the next to make sense of a house asking price?
3. how long did it take this house to sell in similar environment over last many years?
4. Is this house being marketed after a recent termination?
5. whats the supply like of homes in the surrounding community. If low and in this interest rate environment...we'll market value is going to move upwards for sure (if house is priced okay and shows well)
6. what side of the street is the house located on? there is often a premium when backyard has southern exposure.
7. what renos/additions have been done? when were they completed. Even if they look great...you may need to depreciate the cost some to arrive at today's value?
8. Has there been a recent land sale on street. Trace back what a builder spent to put up new house when he purchased the land. Now tie in land value vs the full ask price of the house you're looking at. This should serve some basis
9. what are the mechanics like; electrical; plumbing; insurance premiums if any...take these into consideration relative to comps
10. don't discount the knowledge of a neighbour. some won't talk to you. others will tell you stuff that may actually make or break your decision to buy.
Theres so much more. I never saw this as ....person sees house. person likes house. person offers timely on house. person moves in.
But many do!
Michael Gruenstein MBA CSC
ReMax Realtron
mgruenstein@trebnet.com
http://www.TheSmithsBuyAHouse.com
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