“I’m thinking of selling my 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?”
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 the past 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 clearly valued below $420,000. It sure sounds like properties are NOT always worth what they appraise for, doesn’t it?
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 home on the market, you need a 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, I’d be honored if you call me at (858)457-5368.