How does a real estate agent typically establish market value for a property?

A real estate agent establishes market value for a property primarily through the evaluation of comparable sales and current market conditions. This process, known as a comparative market analysis (CMA), involves analyzing recently sold properties in the same area that are similar in size, features, and condition. By examining these comparable sales, along with current market trends and conditions, an agent can determine a realistic price that reflects the property's value in the current market environment.

This approach is essential because it grounds the property’s value in actual buying and selling activity, rather than subjective opinions or estimates. Market conditions can fluctuate based on factors such as supply and demand, interest rates, and overall economic conditions. Therefore, a thorough analysis offers a more accurate and reliable valuation, which is beneficial not only for the seller but also for the potential buyer, contributing to a smoother transaction process.

While the other choices present elements that could play a role in a real estate transaction, they don’t form the basis of a comprehensive market value assessment. The seller's opinion may be subjective and not necessarily reflective of the market; evaluating a property’s age alone offers limited insight into value; and examining future development plans can provide context for potential appreciation but does not directly establish current market value.