House market value is another way of saying fair market value. They are the price a buyer would pay for real estate and its bundle of rights given adequate exposure to the market and funds available. When these words are spoken about real estate, typically an appraiser is called in to render their opinion of a house’s market value. But how is this determined?
House Market Value
House market value is determined through an appraisal. This is the process that the appraiser goes through, full of research and market data to render an opinion of value. What is important to pick up here is the focus of the appraiser on the typical buyer.
The typical buyer is at the heart and soul of an appraisal opinion and that is important for buyers, sellers, real estate brokers, and investors must realize. It is the goal of the appraiser to outline what the typical buyer would be aware of during a purchase decision.
The property comparables that are utilized to support the opinion of value are based on the typical buyer as well. The rule of thumb goes something like this. If the subject property and the all of the comparable properties are for sale at the same time, then the typical buyer would consider all of these properties as potential purchases.
When you have that lens on in your real estate property valuation and inspection, it makes all the difference. Because house market value is largely dependent on property comparables in the area and the typical buyer.
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