Price, Value, & Cost: The 3 Components of a Home's Worth

 

Proper research is essential for homebuyers. You should be familiar with the steps in a real estate transaction and additional details that are related to property sales. You should also know what your physical and financial needs are. Hiring a real estate broker is a great idea to get you started on the right path. 
 

Real estate brokers have earned the highest and most specialized license a REALTOR can hold and therefore have an advantage over their contemporaries.  We can help you understand the market, project your requirements onto the search, and ensure the home you select is a worthwhile investment. A home's true worth is determined by three main components: price, value, and cost.

 

Price
When deciding if a property is priced correctly, price is what the home should be worth today. However, sometimes seller do not price it right, so what you really want to look at is fair market value. Fair market value is what the seller should reasonably be asking for. Recently sold properties are used to help determine fair market value. These sales should be recent, preferably within the last six months, and should be similar in size and upkeep to the property you are considering. Unfortunately, this Comparative Market Analysis, or CMA, may not include all of the details. The current condition, location, and surroundings, as well as the view from the property, can all affect the price of a house. Make sure your broker includes details like these in the CMA. Appraisals can also help figure out a home's fair market value, but please know there is no exact science to pricing a home.   

 

Value
The value of a property is established by the prospective buyer. When it comes to value, its an opinion of what you think the home is worth, based on how you are going to use it. Value is calculated based on a person's lifestyle, so it is different for everyone. For example, a home near public transportation could be more valuable for someone who does not drive than it would be for someone who does.   

 

Cost
Many sellers believe a house is worth what they paid for it plus how much was spent on improvements and other things. In reality, when a seller improves a home, the value of the property is increased, not the cost. Since value is based on the buyer's preferences, improvements and other extras are all subjective. A seller could receive dissimilar offers from potential buyers because they have made personal decisions about the home's value.

Buyers and sellers need to remember that the CMA is just a starting point, and that value and cost are both subjective. All of these details need to be discussed with your broker, and every property needs to be closely inspected to make sure it aligns with your needs, your lifestyle, and your budget.

 
 
With over 7 years in the business I offer my clients the most comprehensive representation in Maryland.  Not only am I a REALTOR, but I also hold a Broker's license, which is the highest and most specialized license a REALTOR can hold.  Customer Service is my Priority, Selling Houses is My Goal!  Contact me for any and all of your Real Estate Needs.  Proudly Serving Baltimore County (Perry Hall Farms, Kingsville, Glenside Farms, Honeygo Village, White Marsh, Middle River, Essex, Timonium, Dundalk, Pikesville, etc.), Harford County (Amyclae Estates, Bel Air, Bel Air South, Brentwood, Brentwood Manor, Brentwood Park, Bright Oaks, Brook Hill Manor, Cedarday, Country Walk, Fountain Glen, Foxborough Farms, Glenangus, Glenwood, Greenbrier Hills, Hickory Hills, Homestead Village, Irwins Choice, Marywood, Stoneridge Point, The Estates at Cedarday, Todd Lakes, Forest Hill, Monmouth Meadows, etc.) and Baltimore City (Canton, Fells Point, Bayview, Highlandtown, Patterson Park, Hamilton, Hampden, etc.) Another superb colleague You can count on is Paul Gillespie