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It is very important to know the ‘accurate’ market value of your real estate property. There are two ways in which one can determine the exact market value: one is through property appraisal and another is through comparable market value analysis. Usually these 2 methods are used in combination with each other in order to a make a sale price for the seller or offer proposal for the buyer.
Generally people tend to have a common misconception that market value and appraised value are same. But they are not same. The market value is almost similar to an appraisal, but it differs because a certified property appraiser does not carry it out. It is always advisable to appoint a real estate agent, realtor, or broker to update you on the current market value of a property. A market value can be defined as the true worth of your property when it is compared to the similar houses of similar specifications. It is the price that the house would get if it were to be sold at that point in time.
The market value of a real estate property is highly influenced by the property’s condition, the year when the property is on sale, and how urgently the owner wants to sell the property. It is very necessary to compare the value of your property with the other properties in the market before putting it up for sale. This way of comparing is known as Comparative Market Analysis (CMA). You should use the Comparative Market Analysis to help you get a better view of the market value of your property.
Comparative Market Analysis is done by the real estate agent, realtor, or broker. They evaluate sales of equivalent properties to generate an informal estimate of the real estate property’s market value. Making a good approximation of the market value of your property is important when you are putting the property for sale. Doing this will give a good value for you to work with, when setting the initial sale price of your real estate property.
Finally, getting the accurate market value of your real estate property is very necessary, as this is the only way in which you can know the ‘true worth’ of your property.
Bill Manassero is the founder/top dog at “The Old Dawg’s REI Network,” a real estate investing blog, newsletter and podcast for seniors and retirees. His personal real estate investing goal, which is being chronicled at olddawgsreinetwork.com, is to own/control 1,000 units/doors in 6 years. Prior to real estate, Bill and his family lived in Port-au-Prince, Haiti as missionaries, serving orphaned, abandoned and at risk children for their nonprofit organization Child Hope International.
