Buyers are often confronted with how they should go about bidding on a particular home
Understandably, many buyers want to under bid to insure they are getting a good deal. But what if the home is already a good deal? What if they home is already below market value?
The answer to determining value is to understand how value is assessed. There are three common principle used in the real estate industry to estimate value.
Value Estimate Methodology:
The true value of a home is determined by what a willing and able buyer pays for a property. It is therefore challenging to determine an exact value for a home which has not sold or is not on the market since part of the estimate should be based on a buyer's perception of worth-clearly an impossible task.
We employ several techniques to determine value; the Cost approach, Comparable Sale approach, and the Principle of Substitution.
In the linked article we explain all three and why one or more may be appropriate for a given scenario.
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