The Importance of Sold House Prices in Determining Market Value

Many people do not realize that taking a look at the sold house prices in their area can help them determine a realistic market price for a home they are selling or interested in purchasing. While looking at other homes currently being offered for sale is certainly an important part of evaluating a fair selling price for a home, this process only involves looking at the current competition. However, when the prices of homes that have actually sold are evaluated, it can help both the homeowner and prospective buyer get a more accurate picture of what homes actually are selling for. Carefully balancing current asking prices with recent sales is a good way to get a more accurate reflection of what the real estate market will bear in a particular area at any given time.

Most real estate professionals will offer a market analysis for homeowners who are interested in selling their property. This comprehensive evaluation of properties that have recently sold as well as those that are currently on the market can help the homeowner set a fair and competitive price for their home. However, it is important to realize that when using other properties in a market analysis or as a comparable, the property needs to be in the same neighborhood as the home one is trying to value. In addition to using homes that are in the same area, it is important to choose comparables that are very similar in other factors as well.

While it is certainly not possible to find exact comparables, it is possible to choose properties that are similar in age, size and amenities. When looking at the sold house prices in the market analysis, adjustments can be made for things such as age difference, property condition, square footage, amenities or even upgraded features; however, even the most beautiful home with every imaginable upgrade will have a maximum that the market will bear for that particular area. Some homeowners find themselves in a quandary when they realize that they have over-invested in their property and that it is located in an area where the market will simply not bear an asking price that will allow them to recover their expenses for numerous upgrades and extra features.

Today’s home buyers are beginning to realize that they too can make use of market comparables when considering the purchase of a particular property. The prospective buyer’s real estate agent can provide market comparables that include other similar properties in the same area as well as those that have recently sold. Just like homeowners, prospective buyers need to be aware of what a particular area will bear for property values and real estate prices; this can be an especially important bargaining factor when making an offer or negotiating the price of a home.

Regardless of the current home prices in a particular area, buyers and sellers need to be well informed regarding the current real estate market and how it can affect the price of a home. When considering the sold house prices for an area everyone involved will be assured that they are making a wise financial decision.