What is the Value of Your Home: Listing Price (Asking Price) and Market Value
The Listing Price is also known as the Asking Price. This is the price at which a seller lists the property on the market. It is a gross price, meaning the extra costs that come with selling a house are not included. Real estate agents can and should make a Comparative Market Analysis(CMA) to accurately set a home's listing price. A real estate agent will consider different factors to price the house for the most optimal selling experience.
The listing price serves the function of starting a negotiation between a buyer and seller. You may receive offers that match, exceed or are below your asking price as a seller. You then either reject, accept or counter their proposal in response. This can go on until both parties have agreed.
Like how in the stock market, there can be changes from a bear to a bull market, or vice-versa, we see changes in the housing market. These are usually called a Buyer's Market or a Seller's Market. Depending on which one you find yourself in, your real estate agent must adjust the strategy accordingly.
Market Value and Appraised Value
When pricing a house, it is expected to consider several factors, including house condition, size, features, local market conditions, and Curb Appeal. Usually, a house's Market Value reflects what a buyer is most likely willing to pay.
The appraised value is based on an evaluation performed by a professional appraiser during the mortgage origination process. This means that a lender makes sure they loan the correct amount for a house. If the appraisal is way over or below the asking price, it's back to the negotiation table for the buyer and seller.
Sale Price and Net Proceeds
The Sale Price is the price a house sells for. Once the agreement between buyer and seller has been met, the buyer will have the house inspected, and final negotiations can proceed based on the inspection results. In Real Estate negotiations, there are Contingencies within contracts; it's always good to go over these.
Your Net Proceeds are simply the take-home money you get after the total costs of selling your house are subtracted from its final price.
Similar to an appraisal, your house's assessed value is conducted by the local municipality to review and determine what the value should be. The assessor will conduct an assessment and pass his findings to the local tax officials, who will use that to calculate the house's property taxes.
If you have questions that need answers, please don't hesitate to contact us. We'll be happy to help with any inquiry.