Sometimes you can get lost with all of the real estate terminology when you're talking to your agent, reading an article or looking through the various homes on the MLS® System. There are quite a few terms that a layman may not have run into before and the three most important ones that need to be explained are median, benchmark and average prices.
If you were to take all of the sales within a given time period and put them in a list that ranged from the lowest price to the highest one, the median price would be the price value that is found right in the middle. Half of the real estate sales would be lower-priced and half would be higher.
This price is found by taking the total dollar sales volume and then dividing this number by the total amount of sales. This number can sometimes be biased if a lot of lower-priced homes or higher priced ones have been sold within this certain time period.
When the sale price is predicted in a certain area for a general property this is called the benchmark price. The Housing Price Index determines the benchmark price and it is given based on criteria that is commonly found in other properties in the same area. This could be considered a typical sale price and by no means does it take the lower end or higher end properties into account.
If you have any questions about these terms or any other ones be sure to contact your real estate agent. It's important that you know and understand everything about a home sale or purchase before making a final decision and don't be afraid to interrupt your agent if he uses any words that you cannot define.--
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