Determining home value

Real Estate watch

By CLINT FREEMAN

There is ongoing discussion among buyers, sellers, realtors, appraisers and real estate webmasters about the value of a home and how true value is derived. Value, in some cases, can end up being a mere opinion according to who is leading the discussion at the time or what side of the transaction a party is affiliated with. In other cases, value is a determined estimation based on market data. In reality, value is actually not clearcut when it come to real estate.

For instance, “Market Value” is a term used based upon the most probable price an informed buyer will pay for a home, which is then agreed to by a seller. An appraiser can then give an “Appraised Value” derived from his or her professional knowledge, experience and analysis. In some cases, a home may never sell when a seller sticks to their “Seller Value,” which is essentially the owner’s personal opinion of the worth of the home based on desired proceeds from the sale.

Realtors will often hear pricing objections from sellers that have no relationship to actual value. Here are a few: “Another agent said it was worth more,” or “Our home is nicer than that one,”or “People always offer less than the asking price anyway,” or “A buyer can always make an offer,” or “We put so much into this home!” While these are all viable points, “Seller Value” does not change how the present market affects a home’s final value.

The value of a home is also determined by the terms of the purchase contract. For instance: Is the seller willing to pay buyer’s closing costs in order to finalize the sale? Is the buyer willing to accept a seller’s counteroffer terms if the seller sets the offer price and terms too low? Is the seller willing to do any major repairs that may be called for in a home inspection?

Four universal items will determine the marketing value of any home: Price, Location, Condition, and Terms. Price is the easiest factor to control. With location there is sometimes no control, but it’s a very important factor for buyers. Condition allows sellers to influence buyers with remarkable or not so remarkable features. And, terms can always be negotiated based on the first three.

A seller may set the price of a home, but ultimately a buyer will always determine the market value. Be mindful of all these factors the next time the discussion leans toward home sales and real estate.

More market value consultation needed? Call me at (760) 382-1082 and let’s talk!

RIDGECREST FACTS AS OF AUGUST 2019

To date there are 101 homes on the market ranging from $49,900 to $559,900.

The past three months’ prices-per-square-foot average of sold single-family homes are College Heights $173, NW $135, NE $123, SE $130; SW $138, and RC Heights $134.

CALIFORNIA FAST FACTS

The California median home price is $607,990; lowest median home prices are Sikiyou $210,000 and Ridgecrest $263,000. Highest median home price by region is San Francisco at $1,600,000. (Source C.A.R)

Story First Published: 2019-08-23