Real Estate Market Value Vs Price Explained

May 26, 2020

Monday, June 8, 2020

If you are a first-time home buyer or a novice real estate investor, you would want to familiarize yourself with some of the widely used real estate jargons in order to make a sound financial decision. In this article we delve deeply into two of the commonly used real estate terms – real estate market value and market price to help you navigate the real estate market place smartly and confidently.

Real Estate Market Value

Real estate market value is the estimated value or worth of a property in the current market place. It is the perceptive value a seller holds for the property based on several factors such as supply and demand, property condition, property features and so on.

Real Estate Market Price

On the other hand, real estate market price is the amount a buyer is willing to pay for a property and the seller is willing to accept. In comparison between the two, market price is easier to set as it largely depends on property condition whereas real estate market value is subjective. The major difference between real estate market value and market price is that the market value of a property might be a lot higher to the property seller than to the buyer because of a difference in opinions. For example, a seller might consider a pool a value-added feature for the property whereas the buyer does not care for it and finds it an extra hassle to maintain the pool. Nonetheless, when investing in real estate, it is important to be aware of both market value and market price for both the buyer and the seller. Real estate professionals use comparative market analysis to find out market value by comparing similar properties recently sold in the same area.

Factors to consider

When buying or selling a property, the seller has to be aware of current market trends- demand and supply as well as know his property value in order to set the right price. If the seller sets a price too high, the house will sit in the market for days and if the price is set too low, the seller will lose out money. Similarly, the buyer must also be aware of the market value and market price in order to pay a fair price to the seller and not be hoodwinked into buying a property that is a lot worth less than he paid for.

Real estate market valuation is also highly important for real estate investors who want to sell it later. It helps the investors understand what the future estimated property value is likely to be so that they can make a profit out of it when selling in the future.

At the end of the day, real estate market value and market price are correlated in the sense that one must know the market value in order to set the right price of the property and make a successful sale And on the other hand, the buyer needs to know the market value in order to be able to pay a fair price for the property.


If you want to know your home's value in current market, you can use our free home evaluation tool.