Price is practically always a determining factor in home selection. You may want a 5000 square foot home in a certain area, but you may not be able to get it at a price you can afford. More important still, if you're in the market for a new home, it's important to keep in mind the difference between price and value.

An Explanation of House Prices
Price is a general term that may refer to the asking price, the bid price, the seller's absolute price, the buyer's absolute price, and the actual price at which the house is sold. The asking price is simply the price at which the seller lists the home for sale. Because negotiations almost always occur, it's a fair assumption that the seller has listed the price slightly higher than the price he would accept.

The bid price is a bid offered to the seller by a buyer. The seller may accept or reject or counteroffer a bid. Two prices that are generally not known by the other party include the seller's absolute price and the buyer's absolute price. The buyer's absolute price is the absolute maximum price the buyer is willing to pay for the particular piece of real estate. In contrast, the seller's absolute price is the absolute minimum the seller is willing to accept for his house.

Of course, all these types of prices may be meaningless if the buyer does not know the fundamental value of the property and properties in the area. One of the best ways to protect yourself and your investment in any real estate transaction is to know the true value of the property you're buying. Within a minute, our HomeSmart Value Report will use mortgage lenders' complex, reliable algorithms to calculate the value of any home, for only $24.95. Order today and ensure you're considering a sound investment.