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You are here: Home / Thinking about Buying a Home in Metro Detroit? / Fair Market Value? Price Vs Value Driven

Fair Market Value? Price Vs Value Driven

 


Real Estate Pricing – Know the Difference 

We will assist you in determining a value range before you make an offer.  We start the process for your Price Driven Approach we start with the Multiple Listing Service (MLS).  This is a vague report based on other homes in the area, your neighborhood based on square footage, finished basement, and garage size. This report will include Sold, Expired, Pending, and Active.  We also request a report from RPR (Realtor Property Resource) which includes homes sold in the MLS and homes sold privately. This report relies on the data from your neighborhood and surrounding area.  It will use algorithm analytics to determine the Price Range.

Lastly, we look at the Value-Driven Approach

Next, we need to filter what an appraiser’s opinion could be about value.  Part of their mathematical modeling is a condition rating system. Depending on the condition and improvements will move the value up or down.  The appraiser will review updates, features, and quality of materials used to determine Fair Market Value.  Make sure you select a Realtor that knows how to use this approach.  

Terms to understand for Price Driven Approach

Public Record Data: AVM- Automated valuation model (AVM). A service that can provide real estate property valuations using mathematical modeling combined with a database. Most AVMs calculate a property’s value at a specific point in time by analyzing the values of comparable properties. (Example:  October of 2016 to October 2017 for 2018 Values).  Your City, or township uses this algorithm calculations modeling in their public data only to determine value ranges and averages. 

Realtors Property Resource RVM uses public data and the multiple listing service data in their algorithm calculations.  It will also give an AVM and RVM confidence score in the report.

 

Price Driven Approach

I was watching a documentary on Warren Buffett and his approach to business.  Seeing he is in the Real Estate Brokerage business I was curious and watched.  Throughout the documentary, he had the same message…” Price is what you pay, Value is what you get”

When you compare prices from sold properties and using data just from the Multiple Listing Service, I call this Price Driven Approach.   This gives me a benchmark range to start my evaluations.   One of the mistakes I find that Realtor over or under price properties because they only evaluate Price.  

Value-Driven Approach

No two homes are EXACTLY the same.  There are two parts to Value.

Part one – Determining Value

Looking at the property through the eyes of an appraiser.  What information will they need to decide the condition rating of the property?  What does this home have the other homes don’t that can add value?  Is the basement finished, basement full bath vs half bath or no bath at all? What updates are done and when?  What needs to be replaced, for example windows.  We will go over each home and add + or – in each category. 

 Part Two – What value do you see.

Does the home have everything you are looking for and is it move-in condition?  Do you want something that needs work for some sweat equity? Some of the improvements made to the home make it easier to sell but doesn’t add value to the property.  Sellers usually start their price more on the emotional side and overtime logic steps in.  Usually, when buyers start their looking phase, they are logical due to pricing.  You move toward emotion after they find the ONE.

 My job

To filter out the emotion and look at the big picture logically.  When you put in the offer you either feel comfortable with the price they are asking, or you don’t.  If you don’t agree, I need to share with the agent how we determine your number in your offer. It’s important to supply them with all data.  I set the pace for exactly what an appraiser is going to do.

What does an Appraiser Do?

An appraiser like us will start with sold price + or – condition and improvement + or – differences from the sold properties = value.   The condition code will actually change the formula used to decide the value.  There is a 2nd underwriting system that verifies all condition codes the appraiser uses for each property sold. Part of the condition rating equation will be improvements.  Some improvements that increase value; Roof, Windows, Kitchen, Bath(s), mechanical, and maintenance.  Also, does a home have a finished basement?  Is there a full or half bath in the lower level? Is the lot large or small? Do you have a walkout or a daylight basement?  They will filter in garages, a 2 car vs. a 3 car, and lastly, review square footage.  What about the quality of the material….builder grade or high end. 

https://www.metrodetroithomeexperts.com/wp-content/uploads/2020/02/WHAT-IS-ZEROPLUS.mp4

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Our goal is to save you thousands on your real estate transaction.  It’s your money, so we need to put it to work for you. We have our favorite and best loan officer to assist you and answer all your questions.  Unlike some other lenders, Keller Mortgage isn’t spending Millions on marketing and advertising.  Therefore, we pass those savings on to you by offering no fee’s and low rate. Watch the Video ☝☝☝ and learn how to…. SAVE THOUSANDS!

 

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Market Stats and Updates

Know the Market You’re In!

If you haven’t reviewed your 3-year market trends based on the average price in your City and your price range…I recommend you review it now. The report will also provide an idea of how long it could take you to sell the property (Market Supply). This is how long it would take to Sell ALL the home in the Multiple Listing Service if no other homes came on the market.

Monthly Market Report  Recession to Recovery 

It’s important to protect your real estate investments, and to do so you need the facts. This month has been the craziest month ever and I’ve never worked so hard trying to keep up with all the data flooding in from Wall Street, Financial Institution, and Real Estate data sources. Holy Cow! I’m following this very closely and will have updates in most cases daily.

This report is a comprehensive walk-through of the most up-to-date information regarding the real estate industry. So what we knew January-March, well throw it out the window. At the beginning of March, we were talking about having a sensational year. It wound up that in January and February, we sold more houses in more than a decade. So, we were in for a real prime, phenomenal year, and then, BAM! 💥Everything gets put on hold. So, let’s go over the questions that you’re going to be asked, and let’s go over the answers so that you have them. Get Your Report in a Safe Downloadable PDF 👇👇👇

Bottom Line

I recommend as part of your interview process ask questions. Find out what tools they use before you make a commitment to see houses or sign a contract with an agent.  No two homes are alike and why should your approach.  My goal for each of my clients is success based on facts upfront. They’ve done their homework and now it’s time to find their dream home. We will work through the process until you find the ONE that feels like home.

First and Foremost, Safety First! 

As we move forward trying to navigate our way through our new surroundings. Putting your dream of a new home on HOLD shouldn’t be one of them.  Now more than ever knowledge will be your power. Know the Market You’re In and your Negotiation Power. Check out Categories for additional updates regarding the Market | Buying & Selling.

In Closing

If you have any questions, contact us: Chatbot 🤖 at the bottom.  Contact me by Email 📩 or my Cell 📲 @ 248-343-2459.  With all the doom and gloom of the virus, one thing history has shown us, this will NOT define us.  Stay safe! Please share your thoughts below or what future article you would like to see. Your opinion is important to us…. this site is for you ❣

 

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Testimonials | Reviews

Metro Detroit Home Experts Review – Mrs. Goudy

Review for Metro Detroit Home Experts – Pam Sawyer at Team Tag It Sold  My Attorney recommended Pam Sawyer from Metro Detroit Home Experts to help me sell my home.  My husband died of COVID-19 in April.  I had no idea what to do or how to sell.  My house… Read more “Metro Detroit Home Experts Review – Mrs. Goudy”

Metro Detroit Home Experts Home Review - Mrs. Goudy
Trinita Smith-Goudy
Home Selling Client

Metro Detroit Home Experts Review – Miah Family

Review for Metro Detroit Home Experts – Pam Sawyer at Team Tag It Sold  I found Pam Sawyer from Metro Detroit Home Experts online. The best experience Realtor I ever met in my 20 years of experience, I meet someone who is sophisticated. Her name is Pam Sawyer. I deeply… Read more “Metro Detroit Home Experts Review – Miah Family”

Metro Detroit Home Experts Home Review - Miah Family
Shomij Miah
Home Buyer Client

Metro Detroit Home Experts Review – Stacey P.

Review for Metro Detroit Home Experts – Pam Sawyer at Team Tag It Sold  Without Pam Sawyer from Metro Detroit Home Experts helping me through this very difficult time… I don’t think our house would have been sold.  The big “D” on top of the pandemic sent me over the… Read more “Metro Detroit Home Experts Review – Stacey P.”

Metro Detroit Home Experts Home Review - Stacey P
S. Pierce
Home Selling Client

Metro Detroit Home Experts Review – Gordie W

Review for Metro Detroit Home Experts – Pam Sawyer at Team Tag It Sold  I meet Pam Sawyer at Metro Detroit Home Experts years ago when she had a home for sale in my neighborhood.  I liked her marketing style and when my wife passed I called her. I’ve Moved… Read more “Metro Detroit Home Experts Review – Gordie W”

Metro Detroit Home Experts Home Review - Gordie W
Gordie W. Former Editor Macomb Dailey
Home Buyer Client, Home Selling Client

Metro Detroit Home Experts Review – Barrett Family

Metro Detroit Home Experts Review – Barrett Family I called Pam Sawyer from Metro Detroit Home Experts from her sign on one of the homes she had for sale. Our Move Up Dream Home… We had Pam work with us with both the selling of our home and purchasing a… Read more “Metro Detroit Home Experts Review – Barrett Family”

Metro Detroit Home Experts Review - Barrett Family
Mr. and Mrs. C. Barrett
Home Buyer Client, Home Selling Client

Metro Detroit Home Experts Review – Kuron Family

Review for Metro Detroit Home Experts – Pam Sawyer at Team Tag It Sold  I meet Pam Sawyer from Metro Detroit Home Experts at an Open House. Excellent, Excellent, Excellent… My wife and I had been looking for a home on our own for about three months when we ran… Read more “Metro Detroit Home Experts Review – Kuron Family”

Metro Detroit Home Experts Review - Kuron Family
Mr. & Mrs. K. Kuron
Home Buyer Client, Home Selling Client

Metro Detroit Home Experts Review – Sutter Family

Review for Metro Detroit Home Experts – Pam Sawyer at Team Tag It Sold  We originally called Pam Sawyer from Metro Detroit Home Experts when our neighbor’s home sold relatively quickly.  The Theils used several agents before Pam and were unsure what she did, but the home sold quickly for… Read more “Metro Detroit Home Experts Review – Sutter Family”

Metro Detroit Home Experts Review - Mr. and Mrs. Sutter - Team Tag It Sold
Mr.& Mrs. M. Setter
Home Selling Client

Metro Detroit Home Experts Review – Rob and Angie

Review for Metro Detroit Home Experts – Pam Sawyer at Team Tag It Sold  I called Pam Sawyer from Metro Detroit Home Experts on Easter Weekend.  The best way to describe Pam is her Patients and Determination!… We’ve had experiences with several realtors. Pam Sawyer truly goes above and beyond.… Read more “Metro Detroit Home Experts Review – Rob and Angie”

Metro Detroit Home Experts Home Review - Rob and Angie
Rob & Angie
Home Buyer Client

Metro Detroit Home Experts Review – Ted and Mel

Review for Metro Detroit Home Experts – Pam Sawyer at Team Tag It Sold  We met Pam Sawyer from Metro Detroit Home Experts when our home didn’t sell after three other agents.  She sent us a letter, and I called her. We had a Unique 30 + Acres home in… Read more “Metro Detroit Home Experts Review – Ted and Mel”

Metro Detroit Home Experts Review - Mel and Ted
Critzon Family
Home Selling Client

Metro Detroit Home Experts Review – Mrs. G

We met Pam Sawyer with Metro Detroit Home experts through a friend that had used her services before. She made a Tough Situation Painless…Pam was referred, and we were lucky to work with her. We had to sell our Mother’s home when she went into a nursing home. Pam’s knowledge,… Read more “Metro Detroit Home Experts Review – Mrs. G”

Metro Detroit Home Experts Review from - Mrs. G
Mrs. G.
Home Selling Client

Metro Detroit Home Experts Review – Weiner Family

Review for Metro Detroit Home Experts – Pam Sawyer at Team Tag It Sold  We called Pam Sawyer at Metro Detroit Home Experts after receiving a letter when our home didn’t sell the 1st time. When she did the proper advertising, it Sold 1st Day…Pam Sawyer is a true professional.… Read more “Metro Detroit Home Experts Review – Weiner Family”

Metro Detroit Home Experts Home Review - Weiner Family
Mr. & Mrs. Werner
Home Selling Client

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Disclaimer:The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. Team Tag It Sold does not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. Team Tag It Sold will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.

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