Image by Andrey Popov from Shutterstock
The term "fair market value" is the price at which an interested but not desperate buyer is willing to buy and a motivated but not distressed seller is willing to sell on the open market in your location. The set value depends on recently sold similar-sized homes with like amenities, upgrades, and location. These are known as "comparables" or "comps" in real estate jargon.
Your best resource for learning the market value of your home is your trusted real estate professional. They have access to lists of homes like yours that sold on the open market in recent weeks and months. Of course, no one can know if your home will sell since other factors might be at work too. Changes in local industry and the job market might cause prices to move either down or up. Weather can factor in also.
What if prices drop?
Should you enter the market just as prices begin trending down, you might choose to set your price just below the fair market value. That way, you won’t be forced to lower your opening price if they keep trending downward. To stay competitive, increase the value, not the price. Professionals know ways to market your home’s exceptions such as recent upgrades, repairs, a new roof, walkability, proximity to social life and other seemingly intangible items that keep your home at the top of people’s list.
What if prices go up?
Neither you nor your agent can accurately anticipate the market. But if prices seem to be going up, set yours near the top of the “fair” values. Try not to overprice your home since doing so can have unintended consequences. Lenders and underwriters operate slightly behind the market adjustments, so when you set a too high price, your buyers may not qualify for financing.
Setting the price
Your agent can help you set the right price the first time. Trust their knowledge and expertise in the marketplace. If you’re not sure about the price, test the waters by asking your agent to keep your home as a pocket listing. That is, a listing they can tell agents and clients about that doesn’t appear on the multiple listing services (MLS). That way, you can see if your pricing strategy gains any traction.
About the Author
Rudden|Bobruska Team
Gary Rudden, Lisa Rudden, and Nick Bobruska
RUDDEN BOBRUSKA TEAM
What sets your team apart from other real estate teams?
There is no team out in the market that offers what we do. All of us are Realtors, but
we each have specialized roles, which make our team so unique!
After decades of living and selling real estate in the DMV, we have established
ourselves as one of the top real estate teams with our market expertise and
cutting-edge technology. Our savvy high-tech marketing is on every website
and social media source. We have a huge network with other top agents, which
helps to premarket homes and discover homes for buyers before they reach the
open market. Our services include professional in-house staging services, broker
expertise in negotiating and navigating contracts, and buyer representation in all
price ranges. Each client has different needs and we create a marketing plan based
on those needs.
Our most distinct feature is our in-house construction and renovation team. We
are literally a full-service, one-stop shop when selling or buying a home!
How does the in-house construction and renovation team work?
All work is managed and completed through our licensed and bonded construction
crew. No need to call outside contractors. We are like “HGTV,” but we just don’t
have a show! Whether it’s a small makeover or a major renovation, we do it all. Our
sellers love this aspect of our team because we make preparing your home for the
market so seamless. Our buyers love the advice and insight we can give for future
renovations and repairs.
Having a licensed Maryland Home Improvement contractor as part of our team
along with the knowledge, experience, commitment and services that we offer, truly
puts our team as a vanguard in the real estate industry.