What is the best price for a piece of real estate? Mortgage Lenders, Appraisers, and Realtors use what is called the "fair market value" (FMV). FMV has been defined as "the price that a Buyer is willing to pay and the Seller is willing to accept, when both parties are knowledgeable about the property and neither is under any time pressure to buy or sell". Sounds great but how is this price determined?
The starting point for determining a fair price may be an opinion of the value or a "Comparative Market Analysis". Such an analysis uses information on similar properties which are: 1) currently for sale, 2) already sold, or 3) expired properties (those which did not sell).
By comparing similar properties in each of the three categories and the market conditions, Appraisers, Lenders and Realtors come very close to the maximum price that Buyers would be willing to pay for a house.
*The information contained on this page is for information purposes only and does not constitute as legal advice. Although, drawn from sources deemed to be reliable, the accuracy and completeness of the information is not guaranteed. Diane Luu or Legend Real Estate Group does not assume any responsibility or liability. Any distribution, use or copying of the content on this page is prohibited.