Tips & Trends for the Flagstaff Real Estate Market:
Past Articles [April 2005]
We write informative monthly articles about timely real estate topics. Be sure to visit our archives so you can read other past articles, which cover a range of Flagstaff real estate topics. You can also sign up for our monthly newsletter.
Fair Market Value and Where does it Come From?
If you are a seller in our real estate market, knowing the fair market value of the property that you are selling is important. It can make the difference between a quick sale and having your home languish on the market for months. If you are a buyer, knowing the fair market value of a property that you are considering buying gives you confidence in the negotiation process and may prevent you from overpaying for a home.
But what is the fair market value of a house and how is it determined? Simply put it is the highest price that a knowledgeable buyer, who is under no pressure to buy, will pay. This is, at best an educated guess and is most easily determined by comparing the home you are selling or buying to other similar homes that have sold recently in the same neighborhood. This comparison is called a CMA or Comparative Market Analysis. It compares a number of variables between properties, such as the number of bedrooms, bathrooms, square footage, age, lot size and special amenities. Another factor in the CMA is the price per square foot that other homes in the neighborhood have sold for.
But even with these figures, setting a fair market value is an art and not a science. You can use all the numbers you like, but each house is a unique property at that moment and time. No two properties are exactly alike so your Realtor’s knowledge and analysis of past sales, and perhaps even a bit of intuition, play a part in the process.
Just as each property is unique, so is each buyer and seller. Emotions, desire, and the necessity to buy or sell all play a part in the negotiation process even when the fair market value is known by both parties. This is where a good Realtor, who has the knowledge and experience of both the market and dealing with people in a rational manner, can be invaluable.
|
“Mary Monday made the experience of selling my home a genuine pleasure. It delights me to know there are true professionals left in the world.”—BS |
