Understanding Market Value
Market-sensitive pricing can be the key to maximum market
exposure and, ultimately, a satisfactory sale.
An impartial evaluation of market activity is the most effective way
to estimate a property’s potential selling price.
Market value is most simply described as what a buyer is most likely to pay for a property in a certain location. A comparative market analysis (CMA) provided by your Rapid City real estate agent shows similar properties that have sold in the area recently, the properties that are active (the competition), and properties that failed to sell (priced too high? bad location? no curb appeal?). Taking all these factors into consideration helps to determine what the market value is.
1. Homes that have sold in the recent past
• This shows us what buyers in this market have actually paid for properties similar to yours.
2. Properties that are currently on the market
• These are properties that will be competing with yours for the attention of available buyers.
3. Properties that failed to sell
• Understanding why these properties did not sell can help avoid disappointment in the marketing of your property.
The existing pool of prospective buyers determines a property’s value, based on:
• Location, design, amenities and condition.
• Availability of comparable (competing) properties.
• Economic conditions that affect real property transactions.
Factors that have little or no influence on the market value of a house include:
• The price the seller originally paid for the property
• The seller’s expected net proceeds.
• The amount spent on improvements.
The impact of accurate pricing:
• Properties priced within market range generate more showings and offers, and sell in a shorter period of time
• Properties priced too high have a difficult time selling.