Scientifically Proven Home Valuation Formula

"Fair Market Value," Defined

I, along with thousands of other agents, have developed a scientifically proven, 100% reliable way of establishing a home's value.

Ready?

Here's how you'll know any given home is priced at fair market value:

It sells.*

Defining "Fair Market Value"

That may seem unduly glib (if not harsh).

Unfortunately, for many as yet unrealistic Sellers, it also happens to be true.

In fact, the foregoing is the very definition of "fair market value."

Until a Buyer appears who's willing to pay a given price, everything else -- the comp's, what your neighbor got, how much you have into your home (i.e., purchase price + improvements) -- is just noise.

*Of course, that isn't meant to let the listing agent off the hook. I'm presuming that the home's condition, appeal, and marketing are already optimal.

Reason for Tougher Negotations

"What's That House Cost?" -- Vol. #42

Want to buy 100 shares of Microsoft?

If the last trade was for $25.43, it's a good bet that you'll have to pay . . . .$25.43 (or maybe $25.42 or $25.44).

Want to buy a nicely updated, four Bedroom Colonial in East Edina?

That'll be . . . . $950,000. Or maybe $875,000. Or perhaps a cool $1 million.

For the same house.

Defining "Market Value"

Why such a broad range?

Because there haven't been that many recent deals to serve as benchmarks (called "Comp's," or Comparable Sold Properties," as they're known in the trade).

With fewer transactions to serve as precedents, Buyers and Sellers have more ground to bridge to reach what everyone agrees is "market value."