I thought I might provide some insight on How Home Values Are Determined. Everyone who owns a home typically likes particular aspects of that home. But these likes and dislikes have less to do with the value than you might think, so let me give you some value-thoughts to chew on:
- Value is a moment in time and is based on what else buyers can buy, the day they go out and look at your house.
- Prices are not forever, because values are fluid. They go up, and they go down, depending on what other sellers do with their prices.
- Value is never an isolated concept, its always relationship concept, the value in relation to what other people buy.
- Agents and Sellers set prices, but buyers determine value. This is critical because we can set prices all day long, but we don’t have any control over the market. The buyer will tell us if the price is right. Our great marketing will reach buyers, it is the price the seller sets that determines if we reach the right buyers for the home.
I oftentimes find that home owners do not know how home values are determined and I find that one of the biggest roles that real estate professionals have is to continuously remind our Sellers of this. When somebody decides to sell their home, they think about what they want for it and they think about what they will do with the proceeds. Unfortunately, none of the buyers for the home care.
Some of the key things seller’s think about that buyers do not consider important …
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