Fair Market Value or FMV as it relates to any home is understood to be, “the price someone is willing to pay for a home, condo or town-home.” This is totally independent of the “appraisal” which is spoken about at this link.
Where this “working” definition lacks is that it does not take into account the Buyers of the world that have gotten bad information.
The Buyer that got the bad scoop:
We talk to buyers that have been told by someone that they work with, “I bought a home for $50,000 less than list price…” So, their expectations are validated about wanting to write all of their offers for $50K less than current Real Estate list prices.
A good Realtor will advise you about the market before you look at home 1 in person. They will give you current numbers of closings and where the list prices are versus the offering prices. That is why it is important to work with a Local Area Expert.
Qualifications: There are homes on the market that are over priced. There are great deals to be had. Remember, your friend or work associate might be showing off, they might want to get into your “circle of trust”. They also might not be remembering accurately. But, they could have purchased a home for $50k less. Maybe, the home was put onto the market for $50K more than FMV? Bottom Line with regard to the story of getting a home for 50K less – ask more questions, you will soon find out it was not as it sounded on the surface.
A good Real Estate Agent wants their clients to get the best deal possible. Comparables are very important to establish value of Real Estate. A Real Estate agents needs to weigh the Days on the Market for sale versus buyer activity with the specific property for sale.
Your Realtor will also want to analyze what type of sale it is – Regular(equity), Foreclosure, Investment Owned, Bank Owned, Short Sale – etc. Your representative will also want to speak “agent lingo” with the agent representing the seller. A quality Realtor will also want to contact a lender to see if the specific property restricts or prohibits any particular type of financing. All of these things will give you, as a savvy real estate consumer, an edge when it comes to writing an offer for less than list price.
After gathering this data – it will be time to approach the seller with an offer and according to Realtors that is when the real work starts 🙂