Pricing a home correctly for both a quick sale and the best sale price possible is no simple feat. And it gets even more complicated when you consider the various valuations for homes such as the assessed value and the market value. With all these figures rolling around in the mix, it’s difficult to know just how much to list your house for. Let’s take a closer look, then, at assessed value and market value, as well as how much to list your house for in Flemington.
The brief version of assessed value is that it “is created by the county property assessor to determine how much a home is worth for tax purposes. Almost every homeowner will owe property taxes as a way to provide income to local governments, from supporting schools to building roads.”
So assessed value isn’t necessarily what a house is worth on the market – rather, it’s an estimate of how much it’s worth for tax purposes. And there are several factors that go into determining this value. Here are a couple of examples . . .
- Lot size and land value and potential – If, for example, “the assessor thinks the land has potential (it’s in a good area ore similar plots are in high demand), they might levy a higher tax.”
- Improvements to the house and property – The county assessor “will look at any improvements that you have made on the home that could increase its value (like building an addition, adding solar panels, or closing in a patio) and consider any income you could make from it (like renting out a guest house).”
At bottom, the assessed value is all about loss – that is, “the loss to the homeowner and the city if the property were to be destroyed.” What the county assessor is really trying to determine then is how much it would cost to replace your house if it, say, burned down or were destroyed in a natural disaster.
Market value, unlike assessed value, is determined primarily by supply and demand. It is a valuation of a home that is ultimately what buyers will be willing to pay for it, which means that it can fluctuate, sometimes dramatically.
“While assessed value will be calculated annually or every five years depending on your municipality, market value,” according to industry pros, “can fluctuate throughout the year – and even from one month to the next. Market value is the price that a buyer is willing to pay for a home or the price that the seller is willing to accept. Its name reflects where the home values come from the real estate market. When the market is hot and demand for homes in a certain area is high, then home prices will increase as buyers are willing to pay more to move to that area. If no one wants to buy homes in a certain area, then the market value will decrease.”
But market conditions and supply and demand aren’t the only things that can impact market value (also known as fair market value). The condition of the property, as well as desirable features and upgrades, also matter. And there are the current buying trends that have to be taken into account.
Market value is the major factor for determining what you should list your house for in Flemington, but good agents also consider assessed value. To find out more about how your Flemington agent can help you set a listing price, just call 908-448-2770.
How Much to List For
When it comes to figuring out how much to list your house in Flemington for, you’ll lean heavily on market value arrived at by means of a comparative market analysis (CMA) because the assessed value is often less than the fair market value.
Once you’ve considered assessed value, here are the basics of performing a CMA . . .
“First, look at every similar home that’s been listed in the same neighborhood as your property over the last six months. Appraisers don’t use comps that are older than three months, so you might want to narrow the time frame even more. Ideally, you’ll want to come in close to the eventual appraised value of your home. The homes should be limited to those within a ½ mile radius of yours unless there are only a handful of comps in the general vicinity or the property is rural.”
Then you need to make some more comparisons with respect to your CMA, looking at . . .
- Original list prices of the homes compared against final sales prices
- Expired and withdrawn listings
- Pending sales
- Active listings
- Square-foot price comparisons
Having done all this, your next step is to consider market-dependent pricing – that is, analyzing pricing based on market conditions.
“Suppose,” for example, “that the last three comparable sales in your neighborhood were $250,000. Your sales price might allow some wiggle room for negotiation in a buyer’s market, but you’ll want to be close enough to the last comparable sale to entice a buyer to tour your home. You might need to price your home at $249,900 and settle for $245,000 to sell in that type of market.”
“Conversely, you might want to add 10% more to the last comparable sale in a seller’s market. You can ask more than the last comparable sale, and you’ll likely get it if there’s little inventory and there are many buyers. That $250,000 home might sell for $265,000 or more.”
Ultimately, local market conditions matter a lot.
Lean on Your Flemington Agent’s Expertise
Assessed value and market value are pretty easy concepts to understand. The difficulty lies in arriving at an accurate market value. If you don’t, you could drastically reduce your chances of selling at the price you need. But that’s exactly where your Flemington agent can help. So once you’ve got a handle on assessed value and market value and want to know how much to list your house for in Flemington, be sure to contact us today at 908-448-2770.