How To Determine Fair Market Value When Selling Your Home

How To Determine Fair Market Value When Selling Your HomeOne of the key elements when selling your home is determining the fair market value. It requires a careful balance between knowing how to attract the right buyers without jeopardizing the maximum return on your property. In this article we’d like to outline the steps that neuHouzz Real Estate takes to arrive at a fair and accurate market price, and why listing it at an inflated price can hinder a successful sale.

1. Conduct a Comparative Market Analysis (CMA)
The first step in determining the fair market value of a property is to conduct a Comparative Market Analysis (CMA). This involves a thorough analysis of recent sales, current listings, and off-market data of similar properties in the same neighborhood or area. Plus we consider factors like property size, age, condition, features, and location to identify the most relevant properties compared to yours.

2. Examine Current Market Trends
Next, we look at the market trends that could play a role in valuating your property. We need to understand whether the market is favoring buyers or sellers, as this will help us guide our pricing strategy. We check other factors like inventory levels, average days on market, and the pace of sales as they all influence the sales price. By diving into all of these factors, we can quite accurately provide your properties' worth.

3. Assess Specific Property Factors
Beyond comparable sales, we also consider property-specific factors such as upgrades, renovations, pools, unique features, and landscaping. These elements all add value to a property and can justify a higher price compared to similar listings.

4. Account for Local Amenities and Infrastructure
The last set of factors we incorporate into our analysis is proximity to schools, shopping centers, transportation hubs, and other amenities. Buyers place significant importance on location-based conveniences when they determine whether they’re interested in putting in an offer on a house or not.

5. Determine a Competitive Listing Price
Once all the above factors have been carefully researched, we present our sellers with a competitive listing price. One that reflects both the property's fair market value as well as a fair return to you as a seller. It’s absolutely essential that we set this price at a level that appeals to potential buyers without discouraging them, while still maximizing an achievable return for you as a seller.

Why Overpricing Can Be Detrimental
There is always the temptation for sellers to list their house at a higher price than fair market value. At neuHouzz however, we believe there are multiple reasons why this strategy can backfire:

  • Reduced Interest: Overpriced properties will receive fewer inquiries and showings, because buyers and other realtors view them as out of reach or not worth their time.
  • Longer Time on Market: Properties that linger on the market will raise concerns among buyers, leading to a "stale" listing that attracts even less interest.
  • Price Reductions & Lower Offers: Once the inflated listing price leads to subsequent price reductions, it’s signaling buyers that the seller may be desperate to sell. This results in a less favorable negotiation position which leads to possible lower offers and a tougher negotiation process.

Selling a property swiftly and at the right price hinges on accurately determining its fair market value. At neuHouzz Real Estate, we're committed to finding that sweet spot between satisfying both buyers and sellers while employing a thorough and realistic approach to achieve this. By properly assessing the current market conditions and taking the time to listen to your goals as a seller, we can create a smooth transition to your new chapter in life without unnecessary delays. Reach out today at 778-764-1373 and share your real estate plans with us. We'd love to help!

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