Short Answer
Asking price is what the seller hopes to get for the home. Market value is what a willing and informed buyer would actually pay based on comparable sales, condition, location, and current market conditions. Asking price can be above, below, or equal to market value depending on the seller's strategy, motivation, and how well they priced the home. Your offer should be based on market value, not asking price.
Understanding the difference between asking price and market value is essential for making a smart offer. Asking price is a starting point for negotiation. The seller and their agent set it based on their market analysis, but it can be influenced by the seller's emotions, timeline, and strategy. Some sellers price high expecting to negotiate down. Others price low to attract multiple offers. Market value is determined by what similar homes have actually sold for, adjusted for differences in condition, location, features, and market conditions. A home is worth what a willing buyer and willing seller agree on in an arm's length transaction. Your agent will prepare a comparative market analysis to estimate the home's market value. Use that analysis, not the asking price, to determine what to offer. In a seller's market, homes often sell above asking price. In a buyer's market, they sell below. Your agent will help you understand which market you are in.
Bob's Advice
Redfin Senior Agent · AI Certified Agent
I tell my buyers to ignore the asking price and focus on market value. I have seen homes priced $50,000 above what they are worth and homes priced below market to create a bidding war. Let me run the comps and give you an honest assessment of what the home is actually worth. That is the number we should base your offer on.
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