Considerations in Pricing

Many real estate investors buy and sell real property as a means to generate a positive cash flow. This can be a lucrative addition to any financial portfolio, but as with any investments, there are risks involved. One of the more difficult choices is deciding how much to ultimately accept for your real estate and then determining an viable listing price at which to begin.

The first thing that comes to many minds is the county tax appraisal. While this appraisal may seem as good a place as any to discover the cash value of a real estate investment, it will not always give an accurate picture of current trends in the local real estate market. Texas property tax appraisals reflect only general amounts based on a method known as "blanket appraising" that does not fully account for the variety of factors that make true "values" different from property to property.  Various exemptions granted, valuation freezes, etc. can also cloud the picture.

Another popular option is for sellers to obtain a market value appraisal. While most lending institutions require the homebuyer to get a property appraisal, it is rarely necessary for the current homeowner to spend the money in order to get this appraisal done and it is unlikely that a potential buyer would accept this valuation at face-value.  While in select cases this is a viable option, it is an added expense that may not be warranted.

Checking out the listed prices of other real estate in the same general area can be a good indicator of value; however, it is rare that properties in Fredericksburg and the surrounding area sell for the listed price. Additionally. there may  be reasons why listed properties are priced at other than "market value" (e.g. lawsuits, estates, etc.) which can result in these properties being very hard to sell and therefore not "comparable".

When these factors are considered equally, a more accurate understanding of what determines the fair local market value of a property will result. This is where an experienced, qualified and honest real estate professional can objectively look at all of the relevant information and come up with an asking price that is both fair,  reasonable and achievable.