Who determines fair market values for products
The financial product blog
As soon as you buy a house or property, or sell a house or property, you will hear the phrase "fair market value".
But what exactly is the fair market value? How can the fair market value be determined by means of a market value estimate?
Selling a house: what is the fair market value?
According to the Swiss real estate service provider immobilienboerse-ag.ch, the fair market value expresses the price a buyer wants to pay for a property and a seller accepts under reasonable and normal conditions.
This definition assumes that neither the buyer nor the seller are under pressure to complete the transaction. However, if either the buyer or the seller is under time pressure, for example due to a work-related move, either the buyer or the seller can achieve a unilaterally partially better price.
The price achieved then differs significantly from the fair market price. There are many other life situations that can put pressure on one or both parties and which then have a negative impact on the price for one or the other.
In addition to these factors - let's call them stress - other factors also influence the price that can be achieved when selling a home. In contrast to the stress factors that directly affect the buyer and seller, these factors determine the fair market value of a house.
These factors are e.g. the status of the local real estate market and the location, the age and the current condition of the property. Because these factors can change over time, the market value of a property is dynamic and not static. The market value can be determined by means of a so-called market value estimate, such as is offered free of charge by the Swiss real estate service provider Immobilien Börse AG.
When do you have to know the fair market value of a property? In general, it is beneficial to know the fair market value when transferring ownership:
- A house is offered for sale;
- Real estate is part of the divorce process;
- Real estate is part of an inheritance process.
Since things have to happen quickly, depending on the situation, the question arises: How is a fair market value determined?
How is a fair market value determined?
There are two effective and popular ways to estimate the market value of a property: comparative market analysis and property valuation.
The appraisal is based on a thorough and detailed assessment by an independent professional appraiser.
It involves a physical inspection of the property being appraised, as well as the review of ownership data through public records, an analysis of general market data and the application of a valuation approach based on professional practice guidelines. The result is an impartial opinion about the value of a property.
Who offers market value analysis?
Immobilien Börse AG is one of the leading Swiss real estate service providers. Immobilien Börse AG offers a comprehensive service in the area of house sales.
The service includes free property analysis including market value appraisal. The following steps are carried out:
The fair market value is therefore impartial and does not reflect the individual needs of the individual seller or buyer.
It is therefore important to speak to experts before the sale who will help determine the fair market value and compare it with the seller's financing needs (e.g. mortgage contracts, repayments, amortization and the need for new funds for a new house).
The experts at Immobilien Börse AG offer this analysis. Thanks to the transparency, unnecessary stressful situations can be avoided when selling a house and better prices can be achieved.
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