This question is being asked more today by home owners looking to sell their homes. Sellers are surprised to find that their home value is lower than expected and wonder why. Within this muse, there are two sides to the issue; the seller’s and the buyer’s. On the seller’s side, many sellers look at what their neighbor’s home sold for. Sellers may have also put money into their homes updating or repairing them and they expect to get those costs back plus some. Lastly, sellers may feel their home’s unique features, which they love, will make it as desirable to others. These opinions however are flawed.
Buyers have a strong sense that a home purchase today could be worth less tomorrow due to a declining housing market. Combine this with the fact that borrowing money has become more difficult, buyers naturally feel that they must make a careful investment. Buyers need to see a competitively priced home in order to ignite an offer. This does not mean that the seller has to give the house away. What it does mean is that a house is worth only what a buyer is willing to pay for it. The consumer is the true determinate of a home’s market value. A final note, lets not confuse market value with assessed value. We can save that comparison for another day.
