Real Estate Article: Understanding Market Value is the Key to a Successful Sale
04/09/2007

As a participant in the real estate market, chances are, you have probably read up on a lot of the latest real estate news and articles. That means that you have definitely come across the term “market value” more than just a few times. So what exactly does “market value” mean? Market value is the price that buyers are willing to pay for your property.

(Source provided by imrmls.com)

Many people believe that the market value of their property is what a professional appraiser appraises it at. An appraiser values your property using a systematic approach based on previous transactions. Its purpose is not to provide you with an estimate of your property’s market value but rather to provide banks with a value that they can take into account when issuing loans. In a seller’s market, this method will be sufficient because your chances of selling at the derived price are very high because prices are rising. It is the exact opposite in a buyer’s market. In a buyer’s market you cannot rely on an appraised value for your asking price because that value will be based on previous transactions and prices have already gone down since then.

Unfortunately the current market is a buyer’s market and in order to successfully sell your home, you need to ensure that you are able to come up with an accurate market value. On average, a buyer looks at about 12 properties before making any offers. This means that only a few homes that yield the greatest values will receive offers. If your property happens to be priced at market value, you will have a chance to sell your property. That chance increases if you are willing to go below market value and disappears when you place your asking price above market value. I highly recommend that you price your property just a bit below market to maximize chances of a quick sale.

(Source provided by imrmls.com)

Why is it so important to sell your property as quickly as possible? According to research conducted by MRMLS (Multiple Listing Service), the level of excitement and interest your property generates is greatest within the first 2 weeks of listing; this is known as the golden period. By the third week, that interest will decrease substantially and continue to drop as time goes by. New listings are always more popular because there are a large number of agents who have been unable to find a suitable property for their clients. The moment a new listing is available, that listing will be the first one they take their clients to see. The properties that have already been listed for good amount of time are perceived as last resorts because lets face it, there has to be a reason why they have not been sold.

In addition, MRMLS has also investigated what happens to the selling price relative to the asking price as a property sits on the market. Statistical data shows that on average, a property that sells within 4 weeks of listings is sold at about 1.9 percent below the asking price, a property that sells between 4-12 weeks sells at 3.6 below the asking price, and when a property is sold more than 24 weeks after being listed, that percentage increases to 8.9 percent.

(Source provided by imrmls.com)

As you can see it is extremely important to property price your market either at the market price or below if you are willing because it maximizes your chances of not only selling your property but also selling at a price closest to what you desire.

Close Window

Serving Areas: San Bernardino County (California), Riverside County (California), Los Angeles County (California)
Serving Cities: Chino Hills, Chino, Eastvale (Corona), Walnut, Diamond Bar, West Covina, Rowland Heights.
#1 Realtor, Chino Hills #1 Realtor, Chino Valley Local Top Agent, Chino Hills Real Estate Specialist,
Chino Hills Real Estate Professional Realtor.