604-224-5277 Toll Free: 1-855-760-6886

Contact Us...

Or call:
Toll Free: 1-855-760-6886

Your Favourites

Determining the Value of your Home

home_valueThe establishment of your home’s value and the setting of the price point are the most important aspects of the home selling process that you will undertake. The selling price is the key element for all Buyers and their agents, as it is likely the main parameter for the Buyer’s home search.

It is critical that your home is priced at market value, as opposed to being priced based on emotional attachment or wishful thinking. Remember, a Buyer doesn’t care about your memories, or how much you spent on the home. They are interested in buying a property at today’s market value and creating their own memories.

REALTORS® will evaluate your home using active and sold comparables within your neighbourhood. Although no two homes are exactly alike, a skilled REALTOR® will be able to assess value by identifying what your home has, or doesn’t have, with respect to the best recent comparables. The age and condition of your home will also play a significant role in establishing market value. The key is finding that “sweet spot” – the right price point that will generate activity from Buyers and put the most money in your pocket, within a reasonable time frame. Price it too high and you will miss out on the initial flurry of activity. Price your home too low, and you may lose money.

Key Pricing Parameters
Here are some of the key parameters a REALTOR® will use to evaluate your home’s value amongst comparable properties:

  • Current Market Conditions (Is it a Buyer’s or a Seller’s market?)
  • Activity by Price Segment
  • Days on Market
  • Location/Neighbourhood
  • Size of Living Space
  • Size of Lot
  • Number of Bedrooms
  • Number of Bathrooms
  • Overall Condition
  • Proximity to Local Schools
  • Neighbourhood Amenities
  • Available Financing Options

Once your REALTOR® has analysed the market, gained a better understanding of your home and compiled all of the pertinent information, you should be provided with an in-depth comparative market evaluation of your home. This will be reviewed in detail between you, the Seller, and your REALTOR®. The comparative market evaluation allows you, with your REALTOR®’s guidance, to make an informed decision on pricing.

Common Pricing Problems
Deciding on the “just right” price for your home can certainly be challenging. This is where an experienced REALTOR® can offer invaluable guidance and recommendations. However, it can be quite easy to sway from the right price. There are a variety of reasons this may occur:

  • Are you over-pricing your home because:
  • You are deeply and emotionally invested in your home?
  • You are wishing to take money out of the market in order to purchase your dream home?
  • You are trying to recover the cost of renovations and improvements?
  • You have your eye on a higher-priced home, so you “need” to achieve a specific price to buy it?
  • The market has changed and you think you can get more from your home?
  • You want to build room for negotiation into the price?
  • Your REALTOR® acquiesces to your “wish price”?

Common issues with overpricing your home:

  • The Seller may have the impression that overpricing will lead to more offers below the asking price. However, many Buyers will never even consider your home as the price point may be outside their specific range of affordability
  • Missed offers that do not come forth, because Buyers don’t believe the offer will be successful
  • Offers that do come into play are quickly dismissed by the Seller, due to unrealistic expectations
  • A decrease in the number of private showings. Low turn-outs at Open Houses, as the home becomes stale in the market
  • A Seller can easily miss out on tens and even hundreds of thousands of dollars that a qualified Buyer would have been willing to pay
  • An overwhelming amount of interest from “looky-loos” and Buyers who are not likely to put forth an offer

The Initial Flurry and the First Offer
When a home first hits the market, there is an “initial flurry” of activity. Capitalizing on this initial activity could mean a quick sale at a great price. We have all heard the phrase “the first offer is the best offer”. While this isn’t always the case, there is a logical reason as to why it often is.

Here’s why: a Buyer that comes into your home and immediately writes an offer has likely visited and considered all of the other homes on the market that fall within their required parameters. This Buyer is able to acknowledge your home’s true value and does not need to go away and consider other opportunities. They may have previously written offers on other properties that have not materialized. They recognize that your home is priced right and is a great fit for their needs, wants and goals. Therefore, the concept of the first offer being the best offer stems from an informed Buyer recognizing value and “a fit” for their family. Bingo! Home sold!

True Market Value: The Best Strategy
Regardless of what your reasoning is, pricing your home based on true market value is always the best way to achieve your goals. Here’s why:

  • When your home is priced correctly, it sells faster, as it is exposed to more qualified Buyers
  • You are able to capitalize on the marketability of your home
  • Homes priced close to True Market Value typically receive offers more quickly, and these offers are usually closer to True Market Value
  • Local REALTORS® will appreciate that your home is priced at market value, and engage their clients in the process of showing and buying.

This is step 4 of a 10 Part series. Go to Step 5: Preparing your Finances Mortgages & Associated Expenses

Please Like our facebook page

Our Real Estate Affiliates

Copyright © 2021 Faith Wilson Realty Group Inc.