The basic laws of supply and demand influence what a buyer is willing to pay for property. It also influences the amount financial institutions are willing to lend.
Fair market value is defined as the likely price a ready, willing, and able buyer will pay for a property when:
The property is offered for sale on the open market.
The property is marketed for a reasonable period of time.
The buyer has a complete understanding and knowledge of the property.
Neither the buyer nor seller is under abnormal pressure.
The Market
This approach is based on the premise that a prudent person will pay no more for a property than it would cost to purchase a comparable substitute.
Competitive Listing and Sale Prices To form an opinion of value, a Prudential Real Estate Professional analyzes current listings and sale prices of similar homes in your area. Our sales professionals consider properties that recently sold, are currently for sale, or were offered for sale without success. Although no property is identical to yours, those with a high degree of similarity are noted in this report.
The chance of receiving an acceptable offer and completing a sale diminishes significantly when your asking price is higher than current market value. Here are factors that determine price range:
Your property—its strongest selling points
Expired listings—homes offered for sale that did not sell
Competition—the asking prices of other homes for sale in your area
Factors That Can Affect a Property's Value
Factors That Do Not Affect a Property's Value
Location
Time of year
Property and neighborhood
Style, condition, age, and décor
How quickly the seller needs to sell
Improvements and upgrades the owners made to the property
What friends, neighbors, or relatives say a property is worth
What the owners paid when they built or bought the property
Cash proceeds the owners want or need from the transaction
Comparative Evaluation A Prudential Real Estate Professional can prepare a detailed description of your property and estimate the selling price range in today's market. This is known as the comparative or competitive market value of property.
Staying Current with Market Value Once your property is listed, your Prudential Real Estate Professional continually monitors the offering price and new information about the market. Their observations may include:
Interest rates and availability of financing
Listing activity and length of time on the market
Buyer reaction and seller motivation
Professional opinions
Current market conditions and competing properties
PVRMSM is an alternative approach to home pricing. By marketing a home within a price range, PVRMSM addresses the concern of over- or underpricing your home. This approach attracts a wider pool of buyers and invites more offers than a fixed price. At the same time, it allows the seller to control the sales price.
PVRMSM mirrors the natural buying and selling process and can reduce the number of days a home is on the market. Contact a sales professional in your area to learn more.
