My clients become like my family. You’re probably thinking that it’s not wise to do business with family, but I just can’t help it! It’s a level of care that you can’t buy. That idea makes some conversations more important than others and one of those is the conversation I have with sellers about pricing their property for sale. Aside from location and condition, the list price is going to be a big factor in how long the property stays on the market! It’s about at this point that I find myself doing a little vocabulary lesson (well, that is part of why I love my work) because it is part of my mission to build more knowledgeable consumers. Now, don’t get me wrong, buyers and sellers are learning a lot about real estate and it shows in many of their behaviors, but my work here is not done. Often the problem hinges on a misconception about the difference between three critical terms (stay with me here)- Market Value, Assessed Value, Appraised Value. Asleep yet?! Without getting too technical, check out each one below:
· Market Value- The market value of your property is determined by what a buyer is willing to pay, and a seller is willing to accept in today’s market. Buyers make their pricing decisions based on comparing your property to other properties SOLD in your area. Your agent should be able to show you comparable sales because you want to know what everyone one else can see about it before anyone shows up for a look.
· Appraised Value- This is an estimate of value, usually using a direct sales comparison approach and involves an appraiser looking at sold properties, as well as other market data to arrive at a value estimate. Well, there’s a lot more to it but remember I said I didn’t want to get to technical! If your agent has done their job the market value (and pricing strategy) should be pretty darn close to the appraised value. Ta-da!!!
· Assessed Value- This is the value of real property established for the purpose of computing property taxes. Now, I’m not even going to pretend to know all the formulas and procedures for this, but you will see your land appraised separately from the building.
Ok, not the most thrilling thing you’ve read, if you’ve made it this far, but it’s still important stuff to know. Check me out on Pintrest for seller resources.