“I’m thinking of selling my La Jolla home and buying a bigger one. And I’m concerned about asking the right price. Everyone talks about list price, sales price, CMA, appraised value, etc. But what is a home really worth?”
Answer:
Great question.
Recently a young man told me his condo had just appraised at $460,000. But the only sale of his model (virtually identical) in his complex this year was at $420,000. And other near-identical ones are currently LISTED at $420,000 and below and haven’t sold. Appraised at $460,000, but valued at $415,000 or less. Properties are certainly NOT always worth what they appraise for.
Let’s try taking a look at Fannie Mae’s (Federal National Mortgage Association) definition of market value per their residential appraisal form…
“DEFINITION OF MARKET VALUE: The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: (1) buyer and seller are typically motivated; (2) both parties are well informed or well advised, and each acting in what he or she considers his or her own best interest; (3) a reasonable time is allowed for exposure in the open market; (4) payment is made in terms of cash in U. S. dollars or in terms of financial arrangements comparable thereto; and (5) the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions* granted by anyone associated with the sale.”
Eccch. I don’t know about you, but that makes my brain hurt. Here’s a definition I like, and it doesn’t take 5 minutes to read:
“The price a willing buyer and willing seller agree on in an arms-length transaction after full exposure to the market.”
But here’s the Catch-22.
If you want to find out “what a willing buyer and willing seller would agree on in an arms-length transaction after full exposure to the market” before putting your property on the market, you need professional to help you determine the value.
If you’re thinking of selling and you’d like a pretty darn accurate estimate of your home or property’s value, call me at (858)457-KENT.
San Diego short sale expert Gary Kent has written the book on short sales. Gary would like to offer the San Diego Short Sale Guide to you for free – Short Sale Guide.
To find out how much your San Diego home is worth compared to owe much you owe, go to www.ShortOrStaySanDiego.com
The Gary Kent Team 858-457-5368 of Keller Williams is a California Real Estate Broker, License 00862878. We are not licensed to provide legal or tax advice and we encourage our clients to seek legal and/or tax advice early in the short sale process.
by Gary Kent. Gary has successfully helped well over 200 clients and their families sell their homes or other real estate via a short sale. In 1991, he closed his first short sale for a young family, and since has been helping clients get out of stressful financial situations, escape from “under water” mortgages, avoid foreclosure (and the accompanying stigma), save their credit, and maintain their pride through a short sale. You can find Gary on Facebook, Twitter and Google+.
