How is a Home’s Fair Market Value Determined?

home value

There’s a term in real estate that’s relevant to buyers and sellers alike, which is fair market value. Fair market value lets you know how much a home would theoretically sell for in an ideal world where logic was the determining factor. Basically, the fair market value would be what a seller would get if they were in no hurry and waited for the perfect offer.

We all know there are a number of variables that actually interfere with transactions, and both buyers and sellers negotiate until they can come to a price they agree on. While negotiation is a big part of buying a home, understanding fair market value is also relevant. 

There are a few things fair market value isn’t. It isn’t solely what either party thinks the value of the home is, nor is it just the appraised price. It’s also not the tax value. These factors can be part of the fair market value, though.

Calculating Fair Market Value

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Saving for a Down Payment In The Modern Economy

saving for a home

A down payment is an important component of taking a step toward homeownership. Saving for a down payment is also the biggest obstacle that you probably face when you want to buy a home. A down payment is the cash you pay upfront when you’re going to make a large purchase. If you were going to buy a $350,000 home with a 10% down payment, you’d need to have $35,000 in cash.

Then, your mortgage lender provides the rest of the money to buy the home, and you pay your lender back over time. There are a few exceptions to lenders requiring a down payment, such as VA loans, but generally, it is required.

It’s recommended that you put at least 20% down if you’re going to buy a house, but that can be a lot of money. How do you save if you’re living paycheck-to-paycheck? It is possible, but you also might have to make some changes.

Take the First Step

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6 Mistakes To Avoid When Upsizing to a New Home

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Tired of having your already cramped bedroom do double duty as a home office and at-home gym? It might be time to upsize. But while getting more space may seem enticing, upsizing can hold pitfalls for unwary home buyers. Upsizing can be expensive, but if you plan it well, do your research, and shop around, it doesn’t have to be.

Before taking the plunge, here are some mistakes to avoid when upsizing to a larger home:

Read more: 6 Mistakes To Avoid When Upsizing to a New Home

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