Luxury Collection Home Selling Guide | Page 21

M A R K E T VA L U E
U N D E R S TA N D I N G M A R K E T VA L U E
Market-sensitive pricing can be the key to maximum market exposure and
ultimately, a satisfactory sale.

The Existing Pool of Potential Buyers Determines a Property’s Value
• Location, design, amenities, and condition
• Availability of comparable and competing properties
• Economic conditions that affect real property transactions

Some Factors Have Little or No Influence on Market Value
• The price the seller originally paid for the property
• The seller’s expected net proceeds
• The amount spent on improvements
The Impact of Accurate Pricing
• Properties priced within market range generate more showings and
offers; they also sell in a shorter period of time
• Properties priced too high have a difficult time selling
C O M PA R AT I V E M A R K E T A N A LY S I S
A Comparative Market Analysis (CMA) is an evaluation of similar, recently
sold homes (called comparables) that are near the home intended to be
bought or sold. Comparables are homes of similar size, condition, age,
and style that recently sold in a certain neighborhood. Neither a seller nor
an agent can determine the price of a home; the market determines the
price of every home.
D E T E R M I N I N G A M A R K E T- S E N S I T I V E P R I C E
A CMA considers surrounding properties for assessment:
• Recently Sold shows what buyers in the market paid for similar properties
• On the Market shows which properties are competing for buyer attention
• Failed to Sell understand why some properties did not sell
DA N G E R S O F OV E R P R I C I N G
An asking price beyond the market range can adversely affect property
marketing.
• Fewer buyers are attracted and fewer offers will be received
• Marketing time is prolonged and initial marketing momentum is lost
• The property attracts lookers and helps competing houses look better
• If a property does sell above true market value, it may not appraise
and the buyers may not be able to secure a loan
• The property may eventually sell below market value
PERCENT OF BUYERS WHO WILL VIE W A PROPERT Y
+1 0 %
+5%
ASKING PRICE
IN
R E L AT I O N S H I P
FMV
T O FA I R M A R K E T
VA L U E ( F M V )
—5%
—1 0 %
2%
30%
60%
80%
% OF
PROSPECTIVE
PURCHASERS
WHO WILL
LO O K
AT P R O P E R T Y
92%
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