Florida law requires that the just value of all property be determined each year. The Supreme Court of Florida has declared “just value” to be legally synonymous to “full cash value” and “fair market value.”
Therefore fair market value of your property is the amount for which it could sell on the open market
The market value of real estate is the most probable price a property should bring in an arm’s-length transaction occurring in a competitive and open market.
The Property Appraiser analyzes market transactions annually to determine fair market value. I will deal with this in futures posts.
Listing Agent determines Value on a listed property by doing comparable report known as Comparative Market Analysis (CMA). The standard determination is based on three elements of at least 3 different properties having:
- Prices of similar houses, presently being sold on the market.
- Similar properties having contracts and in the closing process. Problem here, you are not sure to what the acceptable price was between buyer and seller, only what was listed on the MLS. The actual agreed price would not be known until the successful closing or recording of the deed.
- Most recent houses that been sold the last 12 months.
Trouble and debate begins, when no 2 properties are not the same but are made the same by the agents adjusting those properties, plus and minus, (ex: having a pool or no pool between the 2 properties) to the comparable property, adjusting the price to equal that of the subject property (the property the buyer is buying). This leads to an opinion, debate with all, buyer, seller and the agents involved to reach a mutual acceptable price to all.
However, the listed price may not be anything of the above, but the price the seller wants for his property! This is why you want your agent to do a comparable market analysis before you submit your offer! Trying to “low ball an offer” can kill the deal. Buyer should make an offer that the seller will respond to with at least a counter offer, if not accept the buyer original offer. “L0w balling” an offer, would place you at the mercy of the seller, if you really want the house, and give more work than necessary to the agent that is helping you; in other word, a waste of time and energy.
Understand, if you are signing a promissory note, to give a mortgage, to buy the house, the lender would be doing an appraisal on the house. The appraisal are done by trained certified appraisers who method of appraising are consider a little different than above, example, the reconstruction value. A Realtor may give an opinion of value when making a prospective sale or taking a listing. This opinion of value may not be referred to as an appraisal or a certified appraisal because the licensee has a personal interest in the transaction and not trained as a certified appraisal. In a federally funded related transaction, insured by the federal government or a loan insured or guaranteed by the federal government requires the services of an appraiser, who must comply with the Uniform Standards of Professional Appraisal Practice (USPAP).
Lastly, if you are buying with all cash, you may want to spend an additional $150 to $ 300 hundred dollar for an official appraisal to be done, and the difference if any, is cover in the contract, in case the appraisal comes in less than the agreed price. This all amount to what is really the true value of a house.
The real trues value, is the agreed price, the buyer is willing to offer, that the seller would accept, with all the above, adjusted accordingly between buyer and seller, done in a arm’s-length transaction.
Thanks for taking the time to read my post. I would appreciate your questions and/opinion. Rate the post as well. Thanks
Ron Wolchesky (alias Realtor Ron W)
Short Sales and Foreclosure Resource Certified Realtor®
Remember: “Pictures without the information is never the whole and true story ~!” Realtor Ron W ..Picture being shown, are used to advertise and draw your interest. The rest, the information, will help you decide. Where that information comes from is IMPORTANT to you. When you view the property and have the inspection, everything will fall into place”.
You can Reach Realtor Ron W via email: firstname.lastname@example.org
Cell: 239-209-1923: H: 239-349-4684