The real estate market is an ever-changing landscape. Currently, sellers wield the upper hand. But that does not mean that buyers will pay an astronomical amount simply because you asked for it. For a successful transaction, you must list your Westfield home at a price appropriate for the current market. Fair market value (FMV) helps sellers determine this price.
Fair Market Value
How to Calculate Fair Market Value
You must take into account several factors to come to a proper FMV. They change from month to month and sometimes even from week to week. Talk to your Westfield REALTOR® about how the market is behaving right now. Look at how much buyers paid for recently sold homes in your neighborhood recently. Look at the price-per-square-foot of homes similar to your own to provide you with an estimated value of your property. Hire an appraiser to assess the value of your Westfield home. All of these variables go into your calculation of FMV.
Fair Market vs Appraised Value
The appraised value is slightly different than the FMV. Banks use the appraised value of a home as part of their consideration in whether to approve or deny a mortgage loan. However, they will not approve a loan with an appraised value below the sale price. When that happens, buyers need to come up with money out of pocket to make up the difference or sellers need to lower their price. If neither side comes to an agreement, the sale falls through. Then, no one wins. But the FMV may end up higher than the appraised value. This happens in more popular neighborhoods. Again, discuss your options with your Westfield REALTOR® before deciding on what to list your property for when you decide to put it on the market.
Originally posted on my Westfield area real estate blog here: https://www.luxuryhomesnj.com/westfield-seller-tips/fair-market-value-westfield-nj/.
Scott Gleason, CRS at RE/MAX Select
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