I had an open house this past Sunday at my listing in Sierra Madre, Malbrough Terrace. I must admit, I was a bit amused at the feedback I received regarding the property.
As with most open houses, the first to visit are the neighbors. Overall the feedback I received was favorable, but there was much speculation and discord on the price of the home and what it will sell for. One of the neighbors told me the house value is determined by current market rent cost, doubled, therefore the asking price is high. I have never come across this type of calculation before.
Through my teachings in real estate school, and when taking classes to obtain certifications, I learned the “buyer” determines the market value. Fair market value is the price a willing buyer will pay and a seller will accept for a property that has been exposed to the market for a reasonable time. If you guessed cost to build it or what the owner paid for it, or put into the home, guess again. No matter how much one has slaved to maintain the property, added to it, or paid for it, the determining price has nothing to do with what the price is worth today.
For example, if there were two other houses that sold for $500,000, exactly like yours, in the same area, less then a mile, within six months to a year sale date, then the Fair Market Value would be $500,000.
In Sierra Madre, the homes are so unique; it is difficult to obtain an accurate true value of the property. There are currently 25 listings on the market and the range in price per square foot is from 248.42 to 795.45 per square foot. The average price per square foot is 360. This number range alone speaks for itself in the disparity of property desirability.
In this case, sales of properties that were similar, but not exact, are used with adjustments for differences in condition, amenities, square footage, and other factors that affect the value. Even a different view can make a difference in price. For instance, a home in a coastal community that has a view of the ocean will be worth more than a home that does not have a view of the ocean. Along this same line, a home with an unobstructed view of the city is worth more than one that has mountain views only. So how much more is a view worth? It all depends how much a buyer feels the view is worth to them. It could be $20,000 to $100,000 or more… who knows?
To determine an accurate value for your property, it is best to seek a professional opinion from a local realtor or appraiser. The sales comparison approach is typically used to determine the value of single-family residence. The subject property is compared with recently sold comparable properties. Then, adjustments are made to compensate for location, amenities, physical features, property rights, market conditions, etc.
I am still amazed at how many people tell me that Zillow evaluated their property at such and such price. Did a Zillow representative come to your home to see the inside of your home? If not, then you just have a ballpark figure; it is not an accurate estimate. When you’re trying to sell a home, it’s important to know your property value so you can sell your home quickly and easily. Remember to keep your expectations realistic – in today’s housing market, your home may not be worth as much as you think.
Check out my new listing at http://homesinsierramadreforsale.com