What’s my property worth? As you might imagine this is a question that comes up often as a land sales professional. It’s a good question and there is no one right answer except to borrow a quote from a real estate veteran, “your property is worth as much as someone will pay for it.”
Before you dismiss this as cliche’ you need to realize there is an element of truth to it. The value of your property has much more to do with how the public views your property and less about the money you have invested in the property. It can be a harsh reality to learn the dream property you built will only bring 75 percent of what it cost to build due to the fact it has been overbuilt. Think of it this way, a million dollar home isn’t going to sell for a million dollars if the homes around it are only selling for $250,000. The surrounding properties will directly impact the value of your property. It is easy to see in the metropolitan areas but the same applies to rural areas as well.
When people ask, “what’s my property worth?” They really just want to know the market value of their property and how much money they can put in their pocket if they chose to sell. Simple enough, right?
That’s where a real estate professional comes in. As real estate agents specializing in rural real estate we spend our days researching the market and evaluating properties. It is our duty to our clients to have our hands on the pulse of the market. Our job is to give landowners an honest assessment of their valued property. Sometimes it is good news, sometimes not so good news. The goal is to give the owner the information they need to make the best decision possible.
What goes into determining market value? Honestly, it isn’t an exact science. There is a certain amount of feel that goes into making this determination. And each agent will have their own way of doing things and their own resources to make the determination. The more information you have typically the more reliable the results.
In order for us to make arrive at market value we first evaluate a property. We need to know exactly what we are dealing with so we know how to compare it to other properties. Once the qualities (both good and bad) are known we search for like properties that have sold in the area over the last 24 months. Sometimes this is as simple as using a few trade tools and finding the answers. Other times you have to know the local market because properties will sell between neighbors or friends and not truly be public knowledge.
The next step is to look at similar properties currently on the market. This one is a little more tricky and requires some experience to sift through this list. You will find properties that compare physically, but they are overpriced and have been on the market for a long time. So when you look at properties currently on the market you must look at why they are priced the way they are in order to know if they are true comparable for your property. For example, if your property has a lake, but the neighboring property is an exact match except for the lake… you should expect your property to have a slightly higher value.
How are things selling in your market? This will also serve as an indicator of your market value. If things are selling, your value could be up. If things are sitting, you wont get as good of a price. Once you have done your homework you will have the information to cypher the base for market value.
Lastly, your motivation for potentially selling a property will factor into the ultimate sale price. The value you place on a property does play a role in the market price. Ultimately you will decide if you will accept the amount a buyer has offered for your property. So it is key to know why you are selling. Do you need to sell? Or are you just considering selling? How quickly do you need to sell?
Once you determine the base market value, you can apply these questions and arrive at a price you would take your property to market with.
Joe Ogden and I take pride in the research and evaluations we conduct for our clients. We know the information we provide will have a direct impact on the money they receive for the sale of their property and thus impacting their families. We take this very seriously.
If you would like to know the market value of your property, please don’t hesitate to reach out to us. We will gladly provide you with our assessment of your property at no cost to you. Please feel free to reach out to me or my team by emailing Mwardlaw@trophypa.com or call / txt 314-914-0840.