Price is always an important consideration to property owners planning to sell. One misconception, however, is that sales prices may be based on what other property owners are asking for their homes.
True, other sellers are the competition. Their prices are seen and compared by prospective buyers. They are also properties that have not sold — yet. The only true benchmarks for “fair market” prices are sales that have already taken place – and closed.
Fair market value is defined as “that price which an informed buyer is willing to pay, and which an informed seller, under no hardship pressure to sell, is willing to accept.” In other words, a fair price is that which has already been paid for similar homes.
When a home is contracted to sell, and an appraisal is conducted, the appraiser uses comparable data only on closed sales. If homes have not been selling at or near the proposed sale price, the appraisal is likely to come in “low.” This can nix a mortgage approval, or require the seller to lower the sales price to meet the appraised value. In either case, overpricing is likely to cause a glitch in the purchase process.
When selling, beware of using faulty comparables to arrive at your asking price. Ask your agent to provide up-to-date sales information. Pricing your home based on the “hopes and dreams” of unrealistic competing sellers can lead to a lengthy wait for a buyer. Price your home correctly and you’ll achieve your goal.
Contact the Kathy Henne Team RE/MAX FINEST by calling (937) 778-3961.