Home Buying in Savannah>Question Details

Holly Mcclel…, Both Buyer and Seller in San Antonio, TX

How do you determine the fair market value of a home?

Asked by Holly Mcclellan, San Antonio, TX Thu Aug 12, 2010

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In real estate, fair market value is the price a buyer will pay and a seller will accept for a property under reasonable and ordinary conditions. This definition assumes that neither the buyer nor seller is under any pressure to complete the transaction. The two effective and popular ways for estimating fair market value are a comparative market analysis (CMA) and a real estate appraisal.

Good luck and never hesitate to contact me if you have any questions I might be able to help answer. If you are considering SAvannah I hope you will visit my website.
Web Reference: http://www.DonCallahan.com
2 votes Thank Flag Link Thu Aug 12, 2010
You have a professional compare the home in question to other homes that have recently sold.

Hank makes a good point, though: you'll only really know the fair market value (if you're the seller) based on what the market does. What a CMA or appraisal attempts to do is indicate what a property most likely will sell for, based on recent past sales. Sometimes--for a variety of reasons--a house may sell for more or less. But, by definition, what it sells for is its true fair market value.

And you also have to look at trends when the market is changing. Example: Let's say the comps show that similar houses sold for $300,000 6 months ago, and $320,000 3 months ago. Is the market going up? And let's say further that homes that were priced at $345,000 are under contract. You can't tell for sure what the actual sales price is, but it does help to know that similar homes came on the market at $345,000 and got contracts on them. And further, there are houses now on the market--not sold, but recent listings--for $350,000. Those can't be counted as comps--and they may sell for substantially under $350,000. Still, that entire pattern would suggest a rising market, and that a comparable home could be worth more than, say, $310,000-$320,000 or so--the number you'd come up with looking at the solid comps.

Hope that helps.
1 vote Thank Flag Link Fri Aug 13, 2010
Don Tepper, Real Estate Pro in Burke, VA
MVP'08
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An appraisal is the second best way, the best way is putting the home on the market and letting it takes it's course.

Appraisals can vary depending on comps available at the time it's completed - a week later one might come available that can change things - but short of listing, that the best way.

Hank
1 vote Thank Flag Link Thu Aug 12, 2010
Hi Holly, a local agent will be able to help you with this - but let me answer your question with some general guidelines - determining fair market value is accomplished with a well thought out pricing analysis drawing on comparable sales. The better the input the better the result, so take some time on those comps.

The analysis that I do looks at comparable sales from 12 months ago, 6 months, and very recent - under contract to 3 months to extract a trend and then applies that trend to actively listed comparables - the result is a recommended market value range.

In a depreciating market, apply a factor for time on the market is helpful - an analysis that just looks at closed sales and under contracts and then factors in the impact of time on the market is useful. The fact is this, in a declining market, time is not the friend of a seller. The formula for success is to price right from the start and to expose like crazy with the goal of selling quickly when the listing is fresh and the excitement and interest is greatest. Do that and you will sell for the most the market will bear. Overpricing is one of the greatest and surely most expensive of marketing blunders.

Good luck,
Jeanne Feenick
Unwavering Commitment to Service - in New Jersey
Web Reference: http://www.feenick.com
1 vote Thank Flag Link Thu Aug 12, 2010
Holly,
I agree with Jeanne so I won't try to say the same thing differently. What I would add is that you really should get an agent to help you sell your house. A good agent will take all the guesswork out of pricing and marketing your home. Contact me if you would like a referral for a San Antonio agent that will take care of you. Good Luck!

Phillip Baird
Realtor
Keller Williams Realty
Austin, Texas
512-289-5738
phillipdbaird@gmail.com
0 votes Thank Flag Link Thu Aug 12, 2010
Holly your Realtor will prepare a Comparative Market Analysis based on recent home sales as similar and as close to your home's location as possible. Adjustments are made for any differences in the subject property and the comparable properties. Ideally you want to use homes that have sold within the past 90 days and are most similar to yours to be as accurate as possible.

I see that you are both a buyer and a seller. When you buy, your Realtor can prepare a CMA for the property you are considering buying as well to help you determine fair market value of the property you considering purchasing so you can make an informed decision on the buying end as well.

If you are relocating to the Savannah area please don't hesitate to let me know if I can be of assistance.
Web Reference: http://savannahgahomes.net
0 votes Thank Flag Link Thu Aug 12, 2010
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