Friday, January 29, 2021

59 - What is Market Value? - Effortless Home Buyers

Today Steven Wear discusses the topic “market value”.

Market value is a familiar term in real estate but there is more than it meets the eye.

Market value is the worth of the property on the market, seems easy to understand right?

But the question is, “what is your market?”.

Remember, a property is only worth what it will sell for. Looking at other listings of
properties won’t actually give an actual depiction of what your market value is.

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Hi, this is Steven with Effortless Home Buyers. One of the most common questions that we get from people that are working with us is what is market value? It's a term that gets tossed around a lot in real estate, but really is ambiguous when it comes to a meaning. So market value is what a property is worth on the market, seems pretty straightforward, but really isn't because the market determines what a value is, but what is your market? It depends on what sort of sales transaction you're pursuing. So for instance, if you were selling a property to an owner, occupant using a real estate agent on the MLS, just a typical real estate transition, the market would be general population, people that are looking to be living in a house. They have some investors in there, but primarily when you're using a real estate agent, it's going to be living in the house.


Now, if you're using the investor market value can be slightly different because market is now just investors. When you're selling to people that are looking to do a lease option or some other more advanced sort of real estate technique, the market gets even smaller. So the short answer is that market value is pretty subjective, but in general, when market value is used as a term, it's referring to what is the largest population of potential buyers thinking of this property being worth? How market value is typically calculated is by looking at similar properties in the immediate area that have sold. So if your property is four bedrooms, two bathrooms, and it's a ranch home, typically looking at other four bedroom, two bath ranch homes in the immediate area without crossing any sort of major roads or parks or geographic obstacles like rivers, that would be a good way to determine what your property is worth, because a property is only worth what it will sell for. So looking at other listings of properties, isn't actually going to give an accurate depiction of what your market value is.

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