Yes, there is a difference in the cost, value and price of a home. While the words basically mean similar things there is a wide difference in how they apply to purchasing a home.
First of course is the price of the home you are considering purchasing. The list price is usually one of the first things that draws you to the home. The list price is not always the purchase price and the purchase price may not be the same as the fair market value price. When a buyer identifies a home they are interested in purchasing, the first thing I do for them is provide a Market Analysis – this report will include recent sold properties in the same community and usually within the past 3 to 6 months. The homes in the report will be of similar size. Some details that may not be included in this report, and frankly can be challenging to know for fact, such as condition of the property, updates and the quality of the updates. Other items that contribute to the value and/or list price of the home can be location, community amenities, views from the property, etc.
This leads us to the value of the home, which is established by the prospective buyer. Value is often the opinion of the buyer, what is it worth and how it meets their livability requirements. The livability requirements are different for each person, some may need a home near a park or bus line and that is very important and worth more to Buyer A than it is to Buyer B, and Buyer B may put more value on a formal dining room than Buyer A does. As you can see value can be subjective depending on who is signing the offer to purchase. Often times you will hear that the “true value of a home is what a buyer is willing to pay”.
Then there is the cost factor. Sellers believe their home is worth what they paid for it plus all of the expenses they have incurred to improve the home as well as other factors that they feel are valuable. Again some of those factors are subjective.
All of these factors play into a real estate transaction, sometimes the figures are very similar and sometimes they are worlds apart.
Keller Williams - Carol Murphy Team