I have a system to determine the fair market value when I want to sell a house in Dallas. Since my buyers will probably require a mortgage loan, I have a system to keep my asking price in line with my competition where it will attract the attention of the best buyers as well. Pricing can be a little difficult in the present market, so that’s where my system comes in handy whenever I need to sell a house in Dallas.
While my buyers are qualifying for a home mortgage, I have to keep in mind that my house has to qualify, too. The value of a house in a mortgage lender’s opinion is doesn’t always match the sale price negotiated between the buyer and seller. Different lenders use unique formulas to determine the fair market value of a house and compute a maximum loan amount. It’s been heavily reported in the news that lenders have become very cautious in qualifying borrowers because there are new federal and state regulations controlling lending procedures. That means the determination of value of any house is ‘way up there in importance, as much as the borrower’s credit score.
This should help explain why any definition of “fair market value” is subject to personal and corporate opinion, but it also has a technical, legal definition. The definition given by Wikipedia reads, “…an estimate of the market value of a property, based on what a knowledgeable, willing, and unpressured buyer would probably pay to a knowledgeable, willing, and unpressured seller in the market.” I need to keep that in mind when I want to sell a house in Dallas in this unstable marketplace.
So, in a perfect world the fair market value would be obvious to everyone, but in the real world it is usually not obvious at all because lenders have to protect themselves to avoid risk, and as a result their estimates of fair market value can be lower than the price a buyer has agreed to pay the seller. Lenders are watching out for their own interests and will err on the side of caution in determining a fair market for every loan.
My own system to determine fair market value in order to sell a house in Dallas at a reasonable price involves doing some market research before listing or advertising my house for sale. I want to know what other houses sold for and how much other sellers are asking for their houses that are on the market now. Doing my research ahead of time is my system for insuring that things should go smoothly for my buyer’s loan approval process.