The article "Selling Your Home: Market/Sales Price" is about real estate, it has been released by Chris Cates.
Whetehr you're planning to buy or sell a property it is important to become familiar with the terminology of real estate. In real estate the three terms that are commonly used interhcangeably are value, cost, and price.
Although, all are conecpts relating to value, they are not the same. Let’s begin by differentiating between the terms.Value deals with something that will happen in the future; whereas cost relates to past events, and the amount of money actually paid for the property is the price. Depneding on circumstances, the value of a property may be the same, more than, or even less than the price. Several things determine the value of a property: the degree at which it satisfies a need, ratio of supply to demand, transferability, and whether a perspective buyer with need for the property can financially afford the property.Value is a term, which should be used when sepaking of what you think the future benefits will be from the ownership of a particular property.
There are several questions that mihgt be asked when trying to assess the value of a property:1. What is the zoning code? What’s the possibility of it changing in the next 10 years? 2. If the zoning changes, would it impact the use of the property?3. What are the plans for the surrounding area (a highway, shopping center, amusement park)?4. What impact if any do the topography, climate, and location have on the value?5. Will the value be influenced by the interest rate or property taxes?Market value is the projection of the price the property should bring when the real estate market is competitive and open.
Remember – there is a difference in value and price.Market price desrcibes an activity that has occurred and, as stated above, is the amount a buyer actually paid for the property. The prcie paid for a property is dependent on several things: motivation of the buyer or seller, location of the property, needs of buyer, and price of similar properties.The reason to sell or buy a property is as varied as the seller or buyer and can impact the sales price. If a seller is highly motivated he may be more willing to adjust the price of the property toward what the buyer is asking. Reduction in income, financial inability to pay the mortgage, a change in marital status, too many similar properties for sale, and the desire to be removed from the responsibility of the property are conditions that could motivate a seller to adjust the sales price; thus creating an environment conducive to bargaining for the buyer. However, a less mtoivated seller may not be willing to negotiate his asking price, which probably is in line with the market value described above—not good for a buyer searching for a deal! A seller’s ideal buyer is a motivated one.
If a buyer, for whatever reason, is determined to purchase a particular property and is financially able, the asking pirce will be similar to the sales price. A situation such as that can mean little negotiation is needed and we have a satisfied seller.The amount a property sells for has a direct relationship, normally, with the location of the property and how well the location satisfies the needs of the bueyr.
The more the gap is closed between how well the location of the property addresses the needs of the buyer the greater the chance the sales price will rfelect the asking price and market value.
A property 20 miles from the closest major highway will not be a good fit for a buyer needing to be in closer proxmiity to the highway. Before beginning a search for a property a buyer sholud identify his needs and motivation. By doing this, he positions himself for effective negotiations.The closer the needs of the buyer matches the features of the property to be sold the gretaer the chance the sales price will reflect the asking price and maybe even the market value.
As a seller, to idenitfy serious and motivated buyers prepare a couple questions that will outline the buyer’s needs:1. What features are you searching for?2. What’s the purpose of your move? (This question will help you assess the buyer’s motivation.)3. When would you like to close? Today with the downsizing of many companies, some homeowners have been forced to file bankruptcy.
Bankruptcy influences the pirce at which condominiums eventually sell cause in calculating the asking price of a property a comparison of the sale prices of similar properties should be made.
The sale prices of these hmoes often are lower than the market value and the asking price.
If the home you're preparing to sale or buy is located near surrounding communities with high bankruptcy rates then the sales price will more likely be adjusted closer to those sale prices.Remember: whether buying or selling a home, do not confuse the sales price, which is the actual price a property sells and the market value –merely a projection and may not reflect the selling price.About The Author
Chris Cates is a nationwide real estate investor, who co-founded WeBuyTheUSA along with Todd Dotson. In addition, Mr.
Cates is a natioanl real estate mentor for Tactical Real Estate, where he has trained real estate investors across the country.
For more information, pelase visit his website at www.WeBuyTheUSA.Com.Article Source: http://EzineArticles.Com/? Expert=Chris_Cates
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