Real estate sales may be slowing, but it remains a sellers’ market. In this context, you may be wondering how much your residence is worth. As you’re perhaps already aware, the municipal assessment isn’t really a consideration when it comes to setting the price.
So how can you determine your property’s market value? A real estate broker is the most appropriate person to answer such a question. Nonetheless, the price range they will present you with isn’t arbitrary: it reflects current housing market conditions.
It’s Not Up to Your Broker…
It’s up to the market! What is more, conditions change rapidly and can be difficult to track. For example, following the pandemic prices skyrocketed with few properties for sale. In this extraordinary situation, brokers had to take even more factors into account than usual, including an imbalance between supply and demand.
An Analysis of Comparable Properties
The first thing a broker does is check the prices at which other properties in your neighbourhood have sold. Specifically, those that most resemble your own residence. This will give them a good idea of your home’s price range which they can then raise or lower according to its particular characteristics. Researching comparables is almost impossible for homeowners to do themselves because they don’t have access to residences’ final sale price (they know how much sellers were asking for, but not how much buyers agreed to pay).
The Determining Factors
Looking over comparables goes far beyond the price. Several factors play a role in calculating your home’s real value. These include the habitable floor space, the number of rooms, if the basement is finished or not, the condition of the materials, the year of construction, and the amenities (pool, central vacuum system, etc.). The broker will equally want to see if the decor in the main rooms is still up to date. In fact, a home with a renovated kitchen and bathroom will be worth more on the market.
The Price May Change Following Renovations
As a homeowner you may actually decide to delay putting your residence on the market for a few weeks to complete refurbishments that will increase its value. This could be replacing damaged flooring, finishing the basement walls, replacing the kitchen outdated cabinets, etc. Your broker can advise you on what work to prioritize. You should, however, understand that not all renovation projects offer a guaranteed return on investment.
The Risks of an Inaccurate Appraisal
You may be tempted to ask your broker to list your home above its true market value, but this can be risky. An overly ambitious price may cause you to lose out on a sale due to a lack of viewings. Moreover, the longer a property stays on the market, the more wary potential buyers will be that something is wrong with it (what if it’s not selling because no one has liked what they’ve seen? why should we then bother visiting?). It’s often the case that homeowners who ask for too much at the outset inevitably end up having to drop their price within a few weeks.
In short, your property’s price may fluctuate over the months as the real estate market continues to evolve. Your real estate broker is best suited to evaluate all the factors. They will ensure that the listing price is neither too high nor too low so that your property attract buyers, receives a maximum number of visits, and earns you a tidy profit.