1.  Seller / Owner
2. Prospective Buyer
3. Financial Institution considering a financing-for-purchase loan

From a Seller/Owner’s strictly financial perspective, “value” equates to dollars of investment, and includes the original cost-purchase price of the property .... the additional dollars put into the property in major improvements (such as remodeled bath or added patio cover).... enhancements such as wallpaper and custom curtains.... major repairs through the period of ownership.... and “upgrades” that occurred due to maintenance or replacements such as top-of-the-line built-in microwave or a new tile roof in lieu of a deteriorated composition roof.  These, of course, are specifics that can be itemized with documented receipts.

And, while the actual dollars spent is usually very important to a Seller/Owner, there is another factor that may be as equal –or even more—important:  the EMOTIONAL VALUE of that property.  Usually the longer the property has been lived-in, the deeper the emotional ties  --and this can frequently add a measure of complexity and difficulty to the “pricing for market-value process”.  In addition, a Seller/Owner’s feelings about the dollar-value of a property are going to be affected by the circumstances surrounding the reason for the proposed sale.

From a prospective Buyer’s position, at the time of dollar-consideration for a property, that Buyer does not yet have a dollar INVESTMENT in the property.  And, while there is usually an emotional feeling involved in selecting a specific house to purchase, there are no emotional “roots” established yet.

If the Buyer is not proposing to pay all-cash but has to arrange lender-financing, then there is a 3^rd component to “market-price”.  The Lender’s “emotion” is limited to DOLLARS!!:  i.e., what does the financial institution stand to lose if the Buyer suddenly defaults on the purchase-loan?

So, what is Market-Price?  It is the actual sales price of a property, determined by the mutual consent of a buyer (what the buyer will pay) and seller (what the seller is willing to receive in exchange for the property).  This figure is then validated by the lending institution’s financial appraisal (professional opinion of dollar value based upon property characteristics compared to current similar properties which have recently closed-sale) in order to complete the transaction.  If the agreed-upon Buyer-Seller price is higher than the Lender’s appraisal, usually the Seller’s end will have to be adjusted downward in order to complete the sale, as very rarely will a Buyer pay in excess of lender-appraised value nor will a financial institution OK a loan-amount that risks their dollar-interest.

As your Real Estate Professional, I will bring you the computer-generated data from Tax and MLS records so you can see the actual current market-price range and then make a careful decision as to where to set your list price.   Keep in mind that the dollar “value” of your property is determined by the market.  The closer your list price is to what the market says it will sell for, the sooner you will have a Buyer and the MORE DOLLARS you will get from your sale. 

YOU will set the list price, not me.  I will, however, offer a professional interpretation of the data, and tell you if I think the price you want to list at is either too low or too high. 

                                    Results that Count!     Liz Pickett