nicest, but also priciest, home in your area.
MARKET PRICE VS. MARKET VALUE
If you have a ready-to-buy, bank-qualified buyer who is willing to pay a price you will accept, that is referred to as “market price.” It is an objective fact without influence. This transaction, once complete, will influence the market value of homes in your area. You determine the price of your home by looking at comparable local sales provided by a professional real estate agent, your property’s condition, and the current supply and demand. What any piece of property might sell for — based on features and benefits in a competitive market, the current supply, and demand for similar homes — is its market value. You might value your home at a higher price than what a buyer will pay — its true market price. Using the bag of oranges analogy, if demand for oranges increases, then they become more valuable, which can affect the price. If the demand for bags of oranges decreases, the value can no longer influence the price. Balanced markets will equalize market price and market value. Individual perspective also comes into play when placing value on a home. Let’s say your home has an abundance of mature trees — a plus in your mind. A buyer who loathes raking leaves will see that as a negative. If you just spent $10,000 to replace your roof, you might think you can get a higher price, but buyers expect the roof to be in excellent condition. Proximity to schools, bus routes, and medical facilities can also create value that certain buyers are willing to pay more for. Buyers look for the right deal, but what they are willing to pay and what the bank is willing to finance have limits. Strategic pricing is your greatest tool when selling your home.
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