The fair market value of a home is an estimate of the value of the house based primarily on how much a willing buyer would pay for it, but also on how much the seller is willing to let it go for. A "fair market" assumes that the home is not in foreclosure and the homeowner does not require a quick sale, but coming up with an accurate price can actually be a bit complicated.
Here are a few of my methods for evaluating property values.
Comparative Market Analysis
I consult a Multiple Listing Service database and find recently sold homes that are very similar to the one the buyer or seller wants to value. I then make adjustments for square footage, age, location, condition and other improvements, such as pools.
Land + Improvements = Fair Market Value
Another option, especially when dealing with lakefront homes it to go back and look at comparable sales for unimproved land during the same period. I then estimate the costs of the improvements on the property and add that to the land sale price to determine the fair market value.
When I compare these two ways of assessing the value of a property, most of the time, the numbers are similar. When they are not, I choose a value in the middle.
Land Only – Estimating Waterfront Worth
I determine the value of lakefront land by applying an average dollar amount per foot of shoreline based on several variables. This estimation comes from previous sales of both improved and unimproved lake front property. For instance, I once again estimate the cost of improvements made to a piece of land, but this time I subtract them from the sale price to determine the price the purchaser paid for the land alone. I then average out the price for each foot on the shore.
What’s My House Worth?
Of course, there are times where you cannot rely solely on these methods. Some properties have unique characteristics, such as wet lands, which can throw a wrinkle into land utilization and impact value. Additionally, accessibility to the property or an encumbering right of way will impact price.
The easiest method for determining the fair market value of a house is to enlist a local Lake George real estate agent who knows the area. And if you’re buying waterfront property on Lake George, it’s important to deal with a real estate agent who specializes in Lake George lake front property and homes.
Interested in learning more about Lake George Real Estate or searching for your dream property on the lake? Contact me to set up a meeting today or call me at (518) 361-0230!
Lonnie Lawrence is a licensed real estate broker and lifetime resident of Lake George. Her 40+ years of experience and vast knowledge of the region have made her an expert on Lake George Real Estate.
How to Establish Fair Market Value | Lake George Real Estate
Lake George Real Estate Agent, Lonnie Lawrence, shares her process for establishing a home’s value prior to selling, and determining a fair purchase price when buying a home on Lake George.