What is "fair market value," and
how do I determine mine?
Simply put, the fair market value of a house is the highest price
an informed buyer will pay, assuming there is no unusual pressure
to complete the purchase.
To get an estimate of fair market value, contact a local
ERA® office and ask for a Comparative Market Analysis (CMA) of your house.
The analysis will give you a realistic figure based on the most
salient features of the local real estate market. It should provide
information about recent sales of similar houses, including how
much they sold for and how long it took. The real estate professional's
price opinion is very helpful in determining the right asking
price.
What's the difference between fair market value and asking price?
You can assume that some negotiation will be necessary to reach
an agreement with a buyer. The professional who presents you
with the results of your CMA will provide all the data that establishes
fair market value. Then, based on your own timing and marketplace
variables, your real estate professional will be willing to help
you establish a competitive pricing strategy. Generally speaking,
the owner's asking price — the advertised price of a house
when it goes on the market — is set slightly higher than
fair market value.
Who can help me determine the right asking price?
Real estate sales professionals suggest asking prices based on
a wide array of information you may not have at your disposal,
including recent listing and selling prices of houses in your
neighborhood. If you're not completely confident in their suggestions,
you may want to order an appraisal.
Next, establish clear priorities. If you had to choose, are
you more concerned with selling quickly, or getting the best
price?
Someone else — a neighbor, friend or relative — may
point out advantages or disadvantages about your house that you
hadn't thought about. Third-party views will help you start thinking
of your house as a commodity, with positive and negative selling
points. Then you should decide on a price that you feel is competitive
and consistent with what other houses in your area have sold
for.
How flexible should I be about the asking price?
Generally, the first three weeks will be the test period of your
initial asking price. If you see showings drop off and very few
return visits, you may want to consider repositioning your asking
price. Most buyers leave room for negotiation when they make
an offer. Thus, a certain degree of flexibility is usually called
for on the part of both the buyer and seller.
While it is ultimately your decision to accept or reject an
offer, or present a counter-proposal, a good
sales professional can be of great assistance to you during the negotiating process.
In fact, negotiation is one of the valuable skills a real estate
professional can offer you. As negotiations proceed — whether
in writing, face-to-face, or by phone — your sales professional
will inform you of your options in responding to each offer from
the buyer, so you can make an educated decision as to how you
want to proceed.
Guaranteed
sale, guaranteed price.
