CHAPTER 2 First Steps to Home Selling o Home Selling
Location is everything in real estate. It’s the most important factor, and often the biggest influence on a home’s price. Whether you’re a first-time seller or someone who’s sold before, it’s crucial to understand the elements that go into setting your home’s price. Pricing your home isn’t a simple formula or purely a numbers game. Many factors come into play. Throughout this book, you’ll see examples of similar homes in similar neighborhoods selling for very different prices, and you’ll learn why. Knowing that your home’s calculated market value might not match what you think it’s worth can help you avoid overpricing, which is one of the main reasons homes sit on the market too long or don’t sell at all. It helps to understand key real estate terms like market value, appraisal value, and assessed value. Knowing the differences can save you frustration and give you confidence when setting your listing price. Market value is generally defined as the most probable price a property will bring in a fair and open market. It’s basically an estimate of what a reasonable buyer would pay in your area, such as your neighborhood or suburb. Appraisal value is a professional’s estimate of your home’s worth at a given time. Appraisers look at many factors, and this value is important when buyers apply for loans because it affects how much money lenders will loan and on what terms. For example, lenders use the loan to value ratio to decide if mortgage insurance is needed. Assessed value is what your local government assigns for property tax purposes. It often differs 3
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