What Is Market Value?

Determining the right price for a property is important whether you are planning to buy or sell a home. If you wish to make an intelligent decision when buying or selling a property it is critical to fully understand what market value is.

The first thing to understand is that the assessed value of a home is not its market value. The assessed value is used by the tax authorities to calculate property taxes. Each municipality has different factors that drive the assessed value. The market value of the property is calculated by taking into consideration the state of the market, recent sales of similar property, current availability of similar property, and other conditions.

A REALTOR has to factor in many things when determining market value. For example the neighborhood has less to do with assessed value than it does with market value. A good neighborhood means higher market value. The location of the property is equally important. The property is assessed based on things like proximity to business districts, highway, town center, etc.

The next thing is the condition of a home. Newer or well-maintained homes have a higher market value. Homes typically in need of repair have a lower market value.

After all of the data is collected the home is compared with similar homes in close proximity. This comparison will include homes that are currently active on the market as well as homes that are pending and those that have sold. Based on all this data the market value is calculated. In today’s market, values can change rapidly and it is best to reevaluate your price regularly.

Contact your REALTOR for a market analysis of your property. Quite often you will be given a range as to the market value. Your agent is the best resource you have available to you when determining a homes value. Whether you are buying or selling their professional advice and guidance is critical.

-Emily Schuyler, e-PRO
CENTURY 21 Select Real Estate, Inc.