“Fair market value is what it is no matter how much buyers or sellers wish it otherwise.”
If you are thinking about selling your home, you’ve probably heard the term fair market value more than a few times. Simply put, this is the price a buyer will pay and seller will accept for a property under reasonable and ordinary conditions. It assumes that neither party involved with the sale is under any pressure to complete the transaction and is truly an impartial price – it does not take into consideration anything about the needs of the buyer or seller.
So how do I determine the fair market value of my property?
The two most common and effective methods for determining the fair market value of a single family home are a comparative market analysis and a real estate appraisal. A Comparative Market Analysis (CMA) is an evaluation of recent sales of similar houses in the same or similar, nearby neighborhood – also known as comparables or “comps” – to determine the value of a home. It is recommended that you have an experienced professional provide you with analysis of comparable homes in your area. Paramount Realty will provide this service free of charge. This helps you determine an asking price based on the amount you believe you can sell your property for in the current market.
An appraisal is a thorough and detailed assessment performed by an independent, licensed real estate appraiser. It involves an extensive physical inspection of the property and elements of the construction, verification of property data through public records as well as an analysis of market data and a valuation using comparable market analysis according to professional practice guidelines. Real estate appraisals on single family homes generally cost around $400-$500 and are usually required by the buyer’s financing agent (at the buyer’s expense). Offers often contain a contingency based on the results of the appraisal prior to closing since most buyer financing is dependent on the sale price being at or near the appraised value.
No matter how much money a seller needs to pay off their mortgage, to recoup what they may have been spent on upgrades, or to invest in a bigger and better new home, or a buyer’s need for a lower price because that is all they can afford, the fair market value of a property does not change. Understanding the fair market value of your home is the first step to determining an asking price that will bring you the best offer. Paramount Realty can provide you with a clear understanding of current home to sales ratios, neighborhood competition, buyer activity levels, and general market conditions so that your goals can be achieved without leaving money on the table.
Contact Dan Konicek to talk about how Paramount Realty can help you determine the value of your home and get you the best offer possible, or download our seller’s guide here.
From downtown to Bay View to the east side in Milwaukee, from Wauwatosa and Elm Grove to the west, Franklinand Racine to the south, and Shorewood and Mequon to the north, Paramount Realty knows the greater Milwaukee region and understands the unique characteristics of each community. We have helped buyers and sellers throughout Milwaukee county including Whitefish Bay, Greendale, and the small village of River Hills.