What is it Worth?
By Jim Palmer Jr.

Realtors® frequently get asked about the value of property by owners who are just curious about how their property compares in the current market, or they really need to know because they will be selling soon or need the value for estate planning purposes.  Realtors® are usually happy to oblige because it offers them the opportunity to give something of value in exchange for the chance to get the selling job later.  I always caution owners that a market analysis is not a certified appraisal, even though the process and results are similar.  It really should be called a Brokers Price Opinion.

Assigning value to a property is a subjective thing since it is only an opinion of value, not fact.  For every Realtor or appraiser, there is a difference of opinion, often tainted by their own like or dislike of the actual property. The value is really defined as “what one buyer is willing to pay, within a time frame that is acceptable to the seller.”

Since most buyers are able to quickly access tons of information in today’s fast paced tech savvy society, they are able to quickly become educated purchasers  armed with a knowledge of value within a given market space.  To fix a price that is over the acceptable value range for a listing can mean that such educated buyers pass over it, allowing it to become stale on the market.

Many have seen the cartoon depiction of how the owner, tax collector, appraiser and buyer all perceive value of homes in different ways, depicted by a large home, mansion, cottage and bungalow (in that order).  We laugh at the disparity in opinions, but this differing perception often causes conflict in real life scenarios.  For example, I once did a market analysis for a potential seller who literally became enraged when I revealed my opinion of value.  He felt that its value was much, much higher and rudely accused me of fraud and sloppy work.  The fee appraisal that followed closely mirrored my own opinion of value, forcing the owner to reevaluate his illusionary stance.

Realtors® often get called upon to help an owner challenge the tax collector’s version of value.  In this revelatory process, most owners find that they can stomach the tax assessors valuation once they understand that the real market value is actually higher.  Call your trusted Realtor® for a market analysis, I bet they come close to the actual sold price!