When you decide it’s time to sell your Miami house, there can be some confusion when it comes to determining the value.
You could pay to have an appraisal done if you REALLY want to know what it’s worth. Plus, an agent should be able and willing to provide you with detailed CMA reports that can give you a clearer picture of how the market looks in your neighborhood. But first, let’s tackle a simpler issue that can sometimes confuse new sellers.
What’s Does Market Value REALLY Mean?
Market Value by Definition
Market value is the most probable price that 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, knowledgeably and assuming the price is not affected by undue stimulus.Fannie Mae
In simpler terms, market value is the amount your property should sell for after being listed for a few months in a competitive open market – assuming that all aspects of the sale go smoothly and there is a genuine interest in your house.
Assessed Value by Definition
The assessed value is the dollar value assigned to a property to measure applicable taxes. Assessed valuation determines the value of a residence for tax purposes and takes comparable home sales and inspections into consideration.Investopedia
It can be difficult understanding what “assessed value” really means. Even with the definition above the term still confuses some. And that’s understandable so let’s try to break it down further.
Country property accessors assign values to houses for tax purposes. However, the amount assigned is not contingent or reflective of changes in the market, meaning fluctuations in the local or wider market does NOT affect the assessed value of your property. And the difference between assessed value and market value is known as the “equalization rate”. The county uses this rate to figure out the actual value of your property.
But wait, there’s more. In addition to the market value and assessed value of your house, there’s also the appraised value which can differ from both of these.
The appraised value is determined by a licensed professional during an appraisal. He or she will rigorously check each and every aspect of your home and estimate your property’s value. Even though an appraisal is carried out by a licensed professional, at the end of the day, it’s still only one person’s opinion. And, there are other appraisal methods that are mathematically calculated based off of your home’s history and market conditions.
How does the internet come into play?
Large real estate sites have their own formulas and algorithms that provide an estimate on property values. But, these values are broad, based on market conditions and information entered by users on the site – not professionals.
That why it’s important to recognize that these online sites – although mainstream and very popular – they don’t always accurately reflect YOUR house. People report seeing these numbers off by $20K, $50K, and even more!
What does it mean for you as a seller?
Do your homework! You can’t cram the night before for this exam. Listing a property requires months of planning and extensive research. Make sure you have all the numbers listed above and understand each term in detail.
And, don’t make the mistake of assuming this is where the hard work ends. You need to ensure that you find a reputable professional to work with who can help you set the asking price for your house by accurately determining its market value.
Getting the asking price RIGHT upfront is critically important. Too high and you risk buyers ignoring the listing altogether. Too low and (well, you make less money) but some buyers might also think there’s an issue with the property or that you’re desperate to sell which doesn’t look good.
Going back just quickly to – setting the asking price TOO high. You might be thinking, “Surely I can start high and repeatedly lower the price till someone bites?” It’s a good strategy for other products, so why not real estate? Well, your pricing history is public information, and repeatedly lowering the amount will encourage buyers to think something must be wrong. Why has this home been reduced so much? Hasn’t a single buyer put an offer down? Does the seller know what they’re doing?
Repetitive price dropping might work for branded products such as clothes or tech but when it comes to real estate buyers typically assume the worst-case scenario to be true. That’s why to get the price you want you must exercise patience and make sure you are working with a true professional in Miami.