Do your Buyers and Sellers understand the true definition of Market Value?

By
Real Estate Agent with Edina Realty

Definition of Market Value

Here's the definition of market value used by the International Association of Assessing Officers (IAAO).

Market value is the major focus of most real property appraisal assignments. Both economic and legal definitions of market value have been developed and refined. A current economic definition agreed upon by agencies that regulate federal financial institutions in the United States of America is: 

The most probable price (in terms of money) which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: 

The buyer and seller are typically motivated; 

Both parties are well informed or well advised, and acting in what they consider their best interests; 

A reasonable time is allowed for exposure in the open market; 

Payment is made in terms of cash in United States dollars or in terms of financial arrangements comparable thereto; 

The price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.

 

Above is the IAAO's definition of market value.  Do you educate your Buyers and Sellers of your area's true market value?  In my opinion, the media has played a significant role in Sellers pricing their homes too high, and Buyers choosing to make low-ball offers (and missing the window of opportunity).  Professional Real Estate Agents must educate Buyers and Sellers on the true market value in their  local area.  Buyers and Sellers are counting on us to be the expert in pricing, whether they are buying or selling.

close

This entry hasn't been re-blogged:

Re-Blogged By Re-Blogged At
Spam prevention

Accessibility option: listen to a question and answer it!

To submit the form,
drag the foot to the circle on the side.

Type below the answer to what you hear. Numbers or words, lowercase:

Location:
Minnesota Crow Wing County
Groups:
Building Your Niche
Celebrating Free Enterprise
Realtors®
The Lounge at Active Rain
Tags:
market value
understanding todays market
brainerd lakes real estate
minnesota realtor

Comments 7 New Comment

Anonymous
Post a Comment
Spam prevention

Accessibility option: listen to a question and answer it!

To submit the form,
drag the cat to the circle on the side.

Type below the answer to what you hear. Numbers or words, lowercase:

Rainmaker
1,083,692
Jim Frimmer
Realtor & CDPE, Mission Valley specialist
HomeSmart Realty West

That definition, which I agree with, is why I dislike Realtors who are trying to sell foreclosures and short sales by saying that it's priced $100,000 below market value. No. It's priced $100,000 below what the sellers bought it at three years ago. That, however, is not today's market value.

December 20, 2008 06:55 PM
Anonymous #4
Anonymous
Anonymous

I will ditto Jim's comment directly above mine.

Best wishes for health, happiness, peace, and prosperity in 2009.

December 23, 2008 12:15 PM
Rainer
28,617
Darla Jensen
Edina Realty

Hi Russel - I agree with your and Jim's opinion.  Thank you for your support.

December 23, 2008 09:14 PM
Rainmaker
563,876
Mike Saunders
Lanier Partners

Darla - it looks like too many agents don't understand the definition either, with the number of overpriced listings out there. The problem right now is nailing the market value d'jour.

December 26, 2008 08:08 AM
Rainer
28,617
Darla Jensen
Edina Realty

Mike - Well said!  Thanks for the visit.

December 27, 2008 07:42 PM
Anonymous
Post a Comment
Spam prevention

Accessibility option: listen to a question and answer it!

To submit the form,
drag the pencil to the circle on the side.

Type below the answer to what you hear. Numbers or words, lowercase:

Rainer
28,617

Darla Jensen

Ask me a question
*
*
*
Spam prevention

Accessibility option: listen to a question and answer it!

To submit the form,
drag the folder to the circle on the side.

Type below the answer to what you hear. Numbers or words, lowercase: