There are a number of factors to consider when setting the price for a property and appraisal is just one of those factors. While a home owner would want the appraised value to be low, thus keeping the taxes on the property low, the same home owner, if trying to sell the property, wants this appraisal to be high, thus allowing them to set the price a bit higher. It’s a contradiction that must be overcome when setting the price on a property.

According to this article in Community Impact Newspaper, “the market value of real estate is know to be the value that a ready, willing and able buyer is willing to pay for a property that has been adequately marketed for an appropriate length of time, in an arms-length transaction, with a ready, willing and able seller.”

Translated, that means someone who likes the property and has the resources to purchase it on the open market can and will do so from a seller who really wants to release ownership and has the means to do so.

First, a real estate agent prepares a comparative market analysis (CMA). This will include the selling prices of properties similar in size, condition, and features to the property in question. Average days on market (DOM) are then considered, along with the absorption rate of the neighborhood.

One burning question that should be considered very closely in real estate, as with any large transaction, is why are they selling it? Does the seller need to unload the property quickly or are they unconcerned with DOM? This could have a huge effect on the price and also open the door for negotiation.