One of the most important decisions a homeowner will make when selling their home is the listing price. It will determine how much interest buyers have in the property and how much negotiation room the seller has. To set the price, it’s important to understand two different but related terms: Market Value and Assessed Value.
What is Assessed Value?
An assessor will look at a property, compare it to others in the neighborhood, and set an assessed value for its worth. This is the amount on which you will pay property taxes. The assessed value seldom changes with the housing market or the economy. Rather, it is affected by any changes you make to your property, such as adding square footage.
What is Market Value?
Market value is basically the amount someone is willing to pay for your home. It is generally higher than the assessed value, but it should be close to or above your asking price. Market value is linked closely to the housing market. A home that is listed in a market with limited inventory will have a higher market value than one where there are numerous properties competing for buyers.
Several factors impact market value, including curb appeal, the number of updates, number and size of rooms and the neighborhood. Some of these aspects you can change while others cannot be altered. The number of other homes in the same area will also affect the market value of your home.
Market value is often the starting point for listing price. Some sellers will set it slightly above market value while others will set it at or just below if they hope for a quick sale. While the market value for your home doesn’t have to be the price you ask, it should have a place in your decision on price. You want to set a competitive price that will make your house more appealing to buyers.
It is important to know that the assessed value is public information, and it can also weigh in buyers’ decisions of how much to pay for a house. If it is significantly lower than the market value, you will have to justify the higher price. If it is not, then you can use it as a selling point. When you know these numbers, it can help you sell your home faster. For additional information on selling your home, feel free to contact me today for a consultation. I will be happy to answer any questions you may have, help you to find your dream home or determine the value of your existing property.
Nancy Davidson is your ultimate real estate resource for Mammoth Lakes, CA and The Eastern Sierra. Visit my website for detailed information regarding today’s real estate markets.
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