How to Determine Fair Market Value of a House
If you are looking to buy or sell a house in Canada, then it is advised that you check its fair market value before anything else. Remember, you do not want to make the mistake of paying too much or listing the home for sale at too low a price. However, unfortunately there aren’t any government bodies that keep a record of the fair market value of homes. Originally, no one actually keeps track of the fair market value of a home, because it changes constantly, depending on the position of the market. However, by following certain steps you can determine fair market value of a house.
Comparison with other homes
You can determine fair market value of a house by comparing it with similar houses in the locality. This will give you a rough estimate as to how much such houses are sold for and their listed prices. It is necessary that you compare square footage and age of the house.
Market Analysis Report
A market analysis report is going to be very helpful for you in getting a clear picture regarding the fair market value of a house. You can get this market analysis report from your real estate agent. The Comparative Market Analysis, or CMA report on the home, which you will get from your real estate agent, will give you information on the houses in the locality. The report will contain details of the past six months.
Get the Square footage of comparable homes
You need to get the square footage of recently sold houses which are comparable as well. It is recommended that you find three but not more than five houses that were sold recently and which are also comparable to the house you need the fair market value for. You casino spiele now need to add up the square footage of the houses under consideration by you and divide by the number of houses. The result that you get from this calculation will be the average square footage of comparable house in the market.
Get the required prices
You need to get the prices of the houses which have been recently sold. You now need to add up the sale price of each house and divide it by the number of number of houses. This will now be your average sale price of all the comparable houses in the market.
The fair market value
You now need to take the average sale price and then divide it by the average square footage, which will give you the average price per square foot. Now multiply this amount by the square footage of the house you want to determine the value of. This will give you the required fair market value.
