Here Are Some Answers Before Putting You Property On The Market

What is a Market Appraisal?

It is a supportable estimate market value of a property based on data obtained from the market place. The probable value is based on a number of factors including national and international conditions, population changes, government fiscal policies, business and industry trends, inflation, interest rates, types of loans available as well as a comprehensive analysis of the market area and any special characteristics of the local neighborhood.

What is the Market Value of your property?

It is the highest price estimated in terms of money which a property will bring if offered for sale in the open market allowing a reasonable time for a purchaser to become fully informed of the attributes of the property and the current prevailing market conditions.
It is assumed that both parties should be aware of all the facts relevant to a fair market price.
It is the current value only for the day if it was carried out.
Therefore, the Market Value should be the Highest and Best price achievable on the property at a particular place and time.

How is the value of your property determined?

The professional real estate agent may use one of the following methods, or a combination, to arrive at an estimated value.

Sale Comparison Approach: the property is compared with other similar properties recently sold with adjustments for differences that reflect the reactions of typical buyers. This approach is best for single family homes/units/townhouses.

Income Approach (Capitalization Method) is based on market value of rent and expenses and the return that the investor expects. This is most appropriate for valuing income-producing properties, such as investment and commercial properties, retail freehold businesses.

Cost Approach (Summation Method) is obtained by adding land value to the estimated reproduction cost new, less depreciation of the improvement including adjustment for loss of functionality and obsolescence. It is most commonly used for Insurance Valuations.

What is CMA (Comparative Market Analysis)?

It is conducted through comparing the property being appraised to recent sales of similar properties. The basis of this approach is that the value of the subject property is directly related to the sales prices of comparable properties. The rationale is that a buyer will not pay more for a property than the cost to acquire a comparable alternative property or to construct a comparable new property.

What mistakes can seller make when setting an ask price?

When a home is listed for sale it becomes a commodity like all other merchandise in the market place. The consumer shops around and compares features and prices prior to making a decision to purchase. Most consumers who are making a major purchase do their research. They are knowledgeable.

It is hard for a seller to: Be objective as they are emotionally attached for various reasons to their home or investment. This may be because of happy memories; the hard work to pay for the home; investment monies spent on repairs and maintenance; having to sell for a set price to finance their next purchase to name a few reasons;

Understand that 'improvements' may not add to the market value, however, improvements may add comfort and convenience to the seller;

Know all the comparative sales in the neighborhood, as the advertised asking price may not be the actual selling price.

Conduct a Competitive Market Analysis (should be done by a professional real estate agent) of truly similar properties in the area as the external appearance of a property does not necessarily reveals the internal condition or features.