A country church once paid $1,500 per acre more than “fair market value” for 2 acres of land adjoining the existing church property. In another transaction, a young couple agreed to accept $7,900 less than “fair market value” for their three-year-old tract home.
Once “fair market value” is established on a piece of real estate, other factors such as availability and time pressure may influence the final sales price. The church wanted the additional 2 acres adjoining church property to use for a picnic area for now and space to build a school in the future. Property located in any other spot would have been unsuitable. Thus the adjacent land held more value for the church because of its location, and they were willing to pay the price.
The couple that accepted $7,900 less than fair market value for their home exemplifies the concept of time pressure. The husband, a middle management candidate within his company, was offered a promotion in another state. He was anxious to move his family and assume his new responsibilities as quickly as possible. Yet, he wanted to keep the family unit together instead of leaving his wife behind to handle the children and all the household duties on her own, not to mention keeping their home in top condition for all the showings. They weighed waiting for a possible higher selling price for their home against a fast move to the new job. The new job won out, resulting in a lower than fair market value sales price.
Keep in mind that even when the final sales price of real estate is higher or lower than “fair market value,” both the buyers and sellers may still be very happy with the transaction. Its just a matter of making choices and deciding what’s best in the long run.
Contact the Kathy Henne Team RE/MAX FINEST by calling (937) 778-3961.