Assessing Market Value in a Blink of an Eye

Some people find this a very hard concept to grasp – determining market value.

Here’s what we want you to do.  Pick up the phone and dial your Realtor’s phone number.  Now ask them to send you “Comparables” on properties in a certain neighborhood or area of your city where you’re searching for deals.

They’ll send you via email or fax, all properties that have sold or been listed in that area for the previous six months of same type and size.

Now take all the prices of those properties, and divide it by the number of properties given, then you have an average price.

For example:
Property 1 - $190,900.00
Property 2 - $178,500.00
Property 3 - $199,900.00
Property 4 - $187,900.00
Property 5 - $182,500.00
Property 6 - $193,999.00
TOTAL        $1,133,699.00

Divide this number by 6 Properties and you get $188,949.83

That was easy, eh!?

Now here’s what YOU do.  Break down the price per sq ft of the listings. The formula is to take the square feet of all the properties, add them together, and in this example, divide it by the 6.

Now, take that figure and divide it into the average sales price we found above.

Welcome to the big leagues!  So if from that point on you arrive at a home that’s asking price is below or well below the average price per square foot of comparable homes in their area, you probably have a deal on your hands!