When buying a house, one of the
primary concerns that most people have is getting a good deal.
Understandably, no one wants to pay more than market value for a
property. If you’re represented by a real estate agent, you will
likely have capable assistance in determining the market value of a
given property. But if you do not have the assistance of a real
estate agent, or if you’re buying a property that is for sale by
owner, you will need to do some research to determine the market
value.
But what do we mean by market value? The market value is what a house
is actually worth, based on sales of comparable properties within the
same community. It is important to make a distinction between sales
and listing prices. Most homeowners set their listing price higher
than what they expect to sale for, sometimes substantially higher.
What a home is listed for has little to do with its actual market
value. That being said, how do you determine market value? You can
start by searching the prices of homes in the immediate vicinity that
have sold recently. This web site provides a
valuable tool to assist
you. Ideally, you should look for homes that are close to the same
size in square feet and that are on a lot of comparable size.
Many community newspapers have Real Estate Sections that periodically
publish home sales information. Frequently this section includes the
number of recent sales, the average amount, the amount by square foot,
and the increase by percentage over the recent year. This information
might be all you need to determine the market value of a house.
If in your search you find a property has been on the market for a
more than a couple of months, it is either in a slow market or is over
priced. If the price has been lowered once or twice, the seller
probably didn’t do his homework when setting the listing price. In
many instances, these properties sell for less than their market value
because the sellers become impatient.
On the other hand, if a price seems too good to be true, it probably
is. Beware of hidden costly surprises.
But also realize that every now and then a true bargain comes along.
If you’ve taken some time to educate yourself about the value of
properties in a given area, you should be able to identify the
bargains that come along every once in a while.
