What is the difference between property value and price? Whether you’re buying or selling a home in Houston, it’s important to understand property value, asking price, and the final sales price.

These values may or may not align, so it’s important to know what they mean and how they differ. In this post, our team at Your Home Sold Guaranteed Realty - Chris Schmidt Team will discuss property value, asking price, final sales price, and how they’re related to each other.

Key Takeaways:

• Property value is how much your home is determined to be worth based on several factors, such as the property’s location, size, and condition, as well as current market trends in the area.
• Asking price, or listing price, is how much the seller initially lists the home for on the market. It may or may not align with market value. 
• While property value provides a baseline, the final price can deviate significantly based on how well the buyer and seller negotiate and react to current market conditions.

What is the Difference Between Property Value and Price?

Understanding Property Value

Property value is how much your home is determined to be worth based on several factors, such as the property’s location, size, and condition, as well as current market trends in the area.

The market value of a property can fluctuate depending on these factors, because a property is ultimately only worth what buyers are willing to pay for it under the current market conditions. For example, in a buyer’s market your home may have a lower market value while in a seller’s market, it may be worth more.

While market value can change depending on market conditions, it’s calculated based on objective criteria. It’s usually determined by either a realtor or licensed appraiser. These professionals will use tools such as a comparative market analysis as well as an in-person evaluation of your home to determine how much it’s worth.

Market Value vs. Price

Market value only changes when market conditions change. However, the price of a home can be different from its market value at any given time.

Asking price, or listing price, is how much the seller initially lists the home for on the market. It may or may not align with market value. The final sales price is how much the buyer agrees to pay and the seller agrees to accept after negotiations.

Both the initial asking price and final sales price can change based on buyer demand, seller urgency, negotiation strategies, and more emotional factors.

While property value provides a baseline, the final price can deviate significantly based on how well the buyer and seller negotiate and react to current market conditions.

4 Factors That Affect Value and Price

In a perfect market, market value and price would be identical, but various factors cause them to differ:

• Market Conditions: In a seller’s market, where demand exceeds supply, properties have a price that’s higher than their market value. Conversely, in a buyer’s market, properties may sell for a lower price.
• Seller Urgency: A seller needing to sell a property quickly due to personal circumstances may accept a lower price than the home’s market value, while a buyer with an urgent need to find a home might pay above a home’s market value.
• Negotiation Skills: Effective negotiation can lead either party to secure a price more favorable than the property’s value.
• Emotional Factors: Sometimes, buyers may be willing to pay a premium for a property because they’ve fallen in love with it, despite what its valuation is

Learn More About Property Value in Houston with Chris Schmidt

A Houston realtor is essential for helping you walk the line between market value and price, whether you’re on the buying or selling end of a transaction. At Your Home Sold Guaranteed Realty - Chris Schmidt Team Chris Schmidt and our team have years of experience working in the Houston metropolitan area. 

Our familiarity with the local market trends, as well as our legendary customer service, are why we’ve developed a reputation as the best realtor in Houston. We can easily help you determine the market value of a home in Houston, whether you’re buying, selling, or are a current homeowner.

To learn more about buying a home with our team, give us a call at 713-322-5604. You can also fill out the form on this page or send a message to [javascript protected email address].

To Discuss Your Home Sale or Purchase, Call or Text Today and Start Packing!