How to Figure Out the Current Fair Market Value of Your Mission Viejo House
Calculating the current fair market value of a house in Mission Viejo
Mission Viejo home sellers and home buyers want to know what the current fair market value of any house, so they can be assured that they get a good deal. Of course, they are on complete opposite ends of the rope playing a game of tug of war with the seller pulling for as much money as he can get and the buyer pulling for the lowest amount he has to pay in order to strike a fair deal. Sometimes, the rope is so long, neither side pulls hard enough and there is no deal to be made. Other times, the need to pull is forgotten and the game ends in a handshake which in most Orange County residential real estate transactions, that means a fully executed contract of sale and a fair deal. Which is exactly what happens when Mission Viejo buyers and sellers agree on the current fair market value of the house in question.
Regardless of which side of the rope you’re pulling, there are some factors that have absolutely no bearing whatsoever on the current fair market value of a house. For handy reference for both sellers and buyers, here are the top four things NOT to take into account as you determine the current fair market value of an Orange County house.
- A random sample of Open Houses in the neighborhoods adjacent to the subject house. As in, those houses that are 1.) Currently listed for sale as opposed to actually sold; 2.)Not necessarily in the same condition or condition as the subject house; and 3.) Not necessarily similar to any homes that have recently actually sold.
- A thorough forensic analysis of the subject property’s ownership history, including the purchase price paid every time it’s been sold in the past. Delivered in spreadsheet format with calculations for the delta between each purchase price and a cumulative total at the end. Dating all the way back to the Treaty of Guadalupe Hidalgo and the Magna Carta. While this can be a fascinating and illuminating exercise, this has no bearing on the current fair market value of a house in Mission Viejo.
- An accordion file folder with containing every receipt for the labor and materials for every improvement made to the house in the past 15 years. Including the five year old trash compactor, the eight year old roof, and the plantation shutters installed just last summer. While this file may be of extreme interest to a tax accountant, it has very little direct bearing on the current fair market value of an Orange County house.
- The calculation of the actual monthly “carrying cost” of the house at a specific purchase price, calculated by taking the prevailing interest rate applied to the loan amount, adding in 1/12th of the total amount of the property taxes (including all bonds and Mello Roos assessments) along with the monthly Home Owner’s Association Dues and 1/12th of the annual home owners’ insurance.
Instead, the current fair market value of a house in Mission Viejo should be based on a comparison of the house to other houses that have sold within the last three months, taking into consideration the similarities and differences in size, location, condition, and emotional appeal. Of course, this is not always what happens and why the tug of war sometimes ends in a sale mate.
I’m Leslie Eskildsen. Just keeping it real in Mission Viejo Real Estate.
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