Fair market value is the price that you can sell a property when all parties are knowledgeable about what it entails. There are many reasons why it’s important to ensure a fair market value for your home. Below are seven reasons that should be considered if you’re selling your home.
1. Get More Offers
Listing a home for a price that’s above fair market value will result in fewer offers because potential buyers interested in buying a home in your neighborhood will simply find another property that’s listed for less down the street or around the corner. Even if they prefer your property, they may be turned off by the high priced listing and opt for something that’s considered a fair price.
2. Limit Negotiations
While negotiation is part of the process when buying or selling a home, not listing it at fair market value can result in unnecessary negotiations that have the potential to jeopardize the deal. In fact, the offer will probably start out at or lower than fair market value. Another consideration is that some buyers will not even consider your house since it’s outside of their budget and preferred range. They will simply move on to a listing that meets their criteria.
3. Maintain Credibility
As a result of information that can be obtained online, buyers are a lot smarter these days. It’s easy to conduct research to find out the value of a home and the amount at which it should be priced. When you list a home outside of an acceptable range, you can lose credibility with buyers. That’s something that’s difficult to get back.
4. Avoid Wasting Time
When you first list a home is when you get the most attention. You need to attract as many buyers as possible within the first 30 days. In fact, many realtors suggest that a home should be sold within the first two weeks of being listed. This won’t happen if the price is not right. You’ll end up wasting time and having to start over again, which can pose a new set of problems.
5. Show Up in More Search Results
When it comes to listing your home, the higher the views the more likely you are to sell it. If your home is listed much higher than similar homes it may not even show up in the search results. This means you might end up with a fresh listing that’s almost invisible because only a limited number of potential buyers will see it. This can significantly hinder your ability to sell your house.
6. Receive an Accurate Appraisal
Another serious issue that can arise if you don’t have a fair market price for your home is the appraisal will be off. Your house simply will not appraise for the price listed. This means you’ll create a lot of unnecessary frustration, which could end up putting the entire deal in jeopardy. The listing price should be based on comparable sales in your neighborhood over the past six months. It should also consider market conditions. Notably, you can increase the listing price if you make significant improvements to the property. A higher price will be justifiable.
7. Prevent a Stale Listing
Once your home has been listed for more than 30 days, it’s considered a stale listing, which is a problem. Having a listing price that’s higher than it should be can cause this to happen. Usually, realtors know that a home listed too high will eventually be reduced, so they wait for that to happen. The longer your house is on the market, the lower you’ll have to drop the price later. Buyers often assume there’s something wrong with a home that’s been on the market for too long.
Ensuring a fair market value when listing your home is imperative. If someone is paying cash for house that fits their criteria, you should consider lowering the price or investing in plumbing upgrades. You can work with a knowledgeable real estate agent to make sure you have the right listing price and everything else is in order.
Salman is a prolific environmental writer, and has authored more than 500 articles in reputed journals, magazines and websites. He is proactively engaged in creating mass awareness on renewable energy, waste management, sustainability and conservation all over the world.
Salman can be reached on salman@cleantechloops.com
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Thank you for this lovely and awesome post. Really enjoyed reading it