The difference between the market value of a property and its marketability is a quite subtle one. Nonetheless, it remains one of the most important things to have in mind before listing your property for sale.
Since the ultimate goal of selling a house is to get it sold at the highest possible price, having a solid knowledge of these essential terms should be your first step to getting there.
So, what exactly is the difference between market value and marketability? Well, the answer lies below in our detailed breakdown of both terms.
The price of the property is its market value, but what determines this value? Simply put – demand and supply.
The general law of demand applies here on the property market just as in other markets. When demand exceeds supply, that is, there are more people willing to buy than people wanting to sell, house prices tend to rise.
And conversely, when supply exceeds demand, that is, there are more people willing to sell than people wanting to buy, house prices tend to drop.
Soto put it simply, the “market value” of a property is usually decided by what buyers are prepared to pay in the current market.
Whereas the real estate market determines the market value of a property, having to consider things like type, size, features and configuration, the marketability is usually up to the seller. It relates to aspects such as the overall condition of the house. The marketability of a property can simply be referred to as its readiness for sale, and appeal to buyers.
Marketability reflects the condition of the property, or, in other words, its ability to stand out from similar properties already on the market. Staging the house will have a direct impact on its saleability. Marketability can be increased through a host of processes including renovation, repainting, refurbishing, decluttering and so on. An experienced estate agent will be able to give you precious advice regarding staging your home and making it more appealing for viewings.
Having a well-preserved property with plenty of attractive features increases marketability, just as having high demand increases market value.
Market Value VS Marketability – Conclusion
As we can see above, there is, indeed, a correlation between the two and this is why sometimes it can be difficult to differentiate between them.
Marketability can, in fact, improve market value. Having a highly marketable property for sale tends to increase attention, and, consequently, the demand for the property. This, in turn, then increases its market value.
Most of the time, however, marketability may not necessarily increase market value. A garden, for example, if well designed and properly maintained, can increase the marketability of a property but won’t usually increase its value by much. It may only help the property attain price equilibrium that ensures it gets sold faster and efficiently.
Both aspects, nevertheless, should be taken into consideration by your real estate agent to guarantee that the maximum potential selling price is achieved