What is the best price for some real estate? Mortgage lenders, appraisers, and real estate brokers use
what is called the "fair market value" (FMV). FMV is defined as
"the price that a buyer is willing to pay and the seller is willing to
take". Sounds great, but how is this
price determined?
The starting point for determining a fair price
may be an opinion of the value or "competitive market analysis" : a CMA. This analysis uses information on similar properties which are: 1) currently for
sale, 2) already sold, or 3) expired listings (which did not sell).
Local, national and international trends and market conditions must also be
considered.
By comparing similar properties of each type and the market conditions, appraisers, lenders and agents come
very close to the maximum price that the market will bare for that home.
