Home Selling in 54449>Question Details

Sheila, Home Seller in 54449

Is fair market price realistic?

Asked by Sheila, 54449 Mon Jan 9, 2012

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8
Yes.

By definition, fair market price is realistic. That is, your house is worth (and should sell for) what is commonly called a "fair market price." What a willing buyer will pay, and what a willing seller will accept.

However, if by "fair market price" you mean your tax assessment (as Jean has guessed), then no: a tax assessment is not a realistic number for the value of your home. I disagree with the advice to price near or at a tax assesssment. Your tax assessment very likely wasn't based on any sort of individual review of your property. Also, it's likely to be out of date--it probably was done/calculated anywhere from 6 months to 3 years ago.

Others here note that buyers are looking for bargains, thus suggesting that "fair market price" is somehow higher than what you can expect to get. Not so. "Fair Market Price" should take into account market conditions and peoples' expectations. After all, as Linda correctly says, fair market price is what the market will bear. So, let's say you bought a home 10 years ago for $100,000. You could have sold it 6 years ago for $200,000. Two years ago, an identical house down the street sold for $125,000. You go online to one of those online home valuation programs (you plug in the address and it Guestimates what your home is worth) and it says your home is worth $95,000. The tax assessment is $120,000. Last week, an identical house next door to yours sold for $115,000.

What's the fair market value? Probably right around $115,000. What you bought it for doesn't matter. What you could have sold it for doesn't matter. What it's assessed for doesn't matter. What an identical house sold for a couple of years ago doesn't matter. What an automated online calculated Guestimates doesn't matter. What matters is what someone is willing to pay today for your house. And probably the best gauge of that is what similar houses recently sold for.

Ask a Realtor to do a CMA (competitive market analysis) on your property. He or she will take a look at similar properties near years that have recently sold. Based on that, he/she will tell you, within a pretty narrow range, what your house is likely to sell for. That's about the best you can do. But that'll be the realistic number.

Hope that helps.
1 vote Thank Flag Link Mon Jan 9, 2012
Don Tepper, Real Estate Pro in Fairfax, VA
MVP'08
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You have received a nice summary from Ron below, have another look.... But here is my short answer to you...
A home in the end is worth what ready and willing and financial able buyer is ready and willing to PAY....
But how do you start the process, by looking at what has recently sold similar to your home, what is competing with yours currently on the market and look at older, newer, bigger, smaller and better, because you will never
figure out exactly why one house sells before another.....

It is almost like finding the right spouse...... Imagine we would all like the exact same???? Just kidding, but
seriously, the buyer needs to fall in love with just your home, after all you do not want to give it away just to
sell it.... So it may take a little longer, a good Realtor will be able to assist not only in the initial pricing, with a reduction or 2 may be built in and planned,but also with marketing the home, and setting it up right, may be
some staging and great great photos on the internet --- really showcasing the best assets of your home will be helpful.
Good Luck to you!
Edith YourRealtor4Life and Chicago and Northern Illinois / North Shore Expert
Working always in the very BEST interest of her clients, Buyers, Sellers and Investors alike....
Edith Always goes the X-tra Mile with a Smile for her clients!
To get to know Edith a bit better and to find out how a Realtor's experience, market expertise and various services offered can make the home sale or purchase a pleasant experience go to
http://www.tinyurl.com/MeetEdithHere
can be great
0 votes Thank Flag Link Mon Jan 9, 2012
Not in today's market. Everyone wants the deal.
0 votes Thank Flag Link Mon Jan 9, 2012
Realistic?
Accurate?
You work with the tools you're given:
The price of a Toaster, or an Automobile, or a gallon of gas, is set by the RETAILER; if we want to pay less, we can go looking elsewear. We find a different retailer, or a different brand.
But, when you find THAT house; you cannot find THAT anywhere else; it is one-of-a-kind.
So how do you put a VALUE on it that you trust?
Appraisal?
BPO?
CMA?
Listing Price?
These are the best we've come up with in 100 years!
Can you do better?
0 votes Thank Flag Link Mon Jan 9, 2012
I would need more details about the home you are selling. I believe you are referring to the county assessed fair market value of the property. Is that correct? In a buyer's market, the closer the asking price is to that number, the quicker it will sell. You can assume that buyers are doing their homework and they will have checked the tax records. Buyers perceive a good value when the asking price and fair market value spread is not far apart. So, yes in today's market that is realistic.
0 votes Thank Flag Link Mon Jan 9, 2012
Fair market price is the price the market will bare, the price a buyer is willing to pay and the price that the appraiser has to meet for the lender.

There isn't very much that is fair about today's market unfortunately. I just had this discussion with my folks over the weekend. They are thinking about selling, but are very head strong on what their home is worth and why. One of the most difficult tasks I have in today's market is giving an honest answer to a potential seller about the value of their home. Often times it will provoke some very bad feelings initially, but sugar coating the truth will not help you.

The main thing to look for is what is going on in your immediate area. This is the criteria that will be used by the lender of the potential buyer for your home. If you have a lot of distressed properties, this will bring down the value of your home unfortunately.

If you haven't already done so, you should have a market analysis done by a qualified agent and start your dialog from there.
0 votes Thank Flag Link Mon Jan 9, 2012
Truthfully Sheila, fair market prices are just a part of the entire process. All in all, a property is only worth as much as a Buyer is willing to pay. And in this market, you need much more than a fair market price to figure out where a property should sell for top dollar in the shortest amount of time. My tools allow me to target a selling price that moves properties in under 100 days from 92% to 100% of list price. So fair market prices are just a start.

Dan Brun
0 votes Thank Flag Link Mon Jan 9, 2012
Sheila,
Your question is not clear...can you be more specific so we can answer your question?
0 votes Thank Flag Link Mon Jan 9, 2012
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