Copyright 2017 2018 Marko Rubel MarkoRubelcom Page 91 of 121What is Market

Copyright 2017 2018 marko rubel markorubelcom page 91

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Copyright 2017 – 2018 © Marko Rubel MarkoRubel.com Page 91 of 121 What is Market Value? It is extremely important for YOU to understand the below definition of market value! FAIR MARKET VALUE (FMV) is the most probable price in which a property should sell at, in a competitive and open market, under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeable, under no pressure of any kind, and assuming the price is not affected by undue stimulus. Is the Market Value and the final selling price of a property always the same ? Think about it… are they always the same? Obviously, they are not. Many times a property would sell for well below its market value, and many times it would sell for more than its market value. For example, if you’re trying to determine the value of a property by looking at different recently sold properties in the vicinity, you need to compare the properties (comparables) which have sold under normal conditions, and eliminate ones that have a distorted selling price. Some red flags to spot distorted prices are: a. The selling price is higher than the listing price –Many times a real estate property would sell for more than its market value if there is some special or creative financing offered (for example, no bank qualifying seller financing). Other times when the selling price is more than the market value would be in the case of some sales concessions granted by the seller (for example, seller is paying all the buyer’s closing costs and loan points). b. The selling price is way lower than other comparable properties – it is usually a sign of a distressed sale. It may even be a trustee sale price from the court house steps (foreclosure sale) which you can determine by looking at the type of deed used to convey the property (i.e. Trustee’s Deed). Usually you can ignore a low sale like that in determining the value of a property IF there’re about 5 market value sales to every below market distressed sale.
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Foreclosure Investing MASTERY - Manual – SECTION 1 . Copyright 2017 – 2018 © Marko Rubel MarkoRubel.com Page 92 of 121 NOTE : FMV (Fair Market Value) and ARV (After Repaired Value) are two different terms used to arrive at the same number. FMV assumes a property in average condition for the neighborhood. ARV suggests that the market value for the property after repairs have been made which will bring the home into average or above average condition for the neighborhood. During the remainder of this course, when you see these terms, they both mean the Market Value. How to Establish Market Value? It is extremely important to establish market value of a property accuratly prior to making an offer. You need to know what the property would sell for in an open market, so you can determine what you should offer in your purchase contract.
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  • Spring '15
  • Mr. Gardner
  • Subprime mortgage crisis, short sale, Hard money lender, Hard money loan

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