The big difference between value and price of a property

Diferencia entre el valor y el precio de la vivienda

In the real estate market, it’s common to hear the terms “value” and “price” of a property. While they may seem synonymous, they are actually very different concepts that every seller must understand before putting the property on the market. In this article, I will explain the significant difference between the value and price of a property and how this can affect a potential buyer’s decision to purchase.

What's the value of a property?

The value of a property refers to the importance or usefulness that the property has for potential buyers and how much they are willing to pay for it. This value can be influenced by a series of factors, including location, size, features, the safety of the surroundings, the quality of construction, and market demand.

For example, a house in a central area with easy access to major public transportation routes will have a higher value for people looking for a place where everything is close and at hand. In addition, the value of the property can increase if it has features such as large gardens, a pool, an attractive architectural design, and a functional internal distribution that does not require renovations.

It is important to note that the value of a property can vary according to market trends and buyers’ preferences at a given time. For example, during the COVID-19 pandemic, buyers may have valued properties with green areas or spaces for teleworking more.

What's the price of a property?

The price of a property is the amount of money being asked for it on the market. It is the amount that is negotiated during the transaction and paid at the time of purchase. The price of a house can vary greatly in different locations or times.

For example, the price of a house in an exclusive neighborhood in a city may be much higher than in a less exclusive area. Additionally, the price of a property can vary if the real estate market is experiencing low demand. This means that the price of the property could decrease to attract potential buyers. However, if demand is high, the price could increase to take advantage of the favorable market.

Why is the balance between value and price important?

To effectively sell a property, it is crucial that the value and price are in balance. If the perceived value of the property is lower than the asking price, the house is likely to stay on the market for a long time without receiving offers or visits. On the other hand, if the value offered is higher than the price, the seller can attract potential buyers and receive offers for their property.

An example of how the imbalance between value and price can affect the sale of a property is if the seller asks a very high price for a property in an area with a high supply of similar properties in need of a major renovation. In this case, it is likely that the value of the property does not match the asking price, which can cause the property to stay on the market for months without receiving offers.

The buyer: key between value and price.

In the sale of a property, it’s not only important to know its value and establish an appropriate price, but also to identify the potential buyer. In fact, the buyer is the decisive factor between value and price, as their decision determines whether the property is sold or not. Therefore, to sell effectively, it’s crucial to understand how your property can meet the potential needs and preferences of buyers.

For this reason, it’s essential to create a buyer persona. This fictitious profile is based on the target audience that you want to reach and represents the ideal person who may be interested in buying your property.

Only after identifying the key values of your property and the potential buyer can you establish a fair price based on the market in the area.

Conclusion

In short, as a seller of a property in the real estate market, it is crucial that you know the difference between the value and the price of your property. This knowledge will allow you to find the right balance between both aspects and effectively sell your property.

In addition, to not waste time and energy, it is essential that you understand the needs and preferences of the potential buyer who may be truly interested in your house. As a phrase says, “there is no need to use a sledgehammer to crack a nut.” Each property has its own audience.

If you need help, we recommend that you contact one of our real estate agents, who can provide you with a comprehensive evaluation of the property. They are trained to take into account all relevant factors to determine a fair market value.


Compare listings

Compare