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How Will I Know If I Fairly Priced My Home?

by in Home Selling
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How Will I Know If I Fairly Priced My Home?

In the current hot housing market, media reports are filled with examples of homes selling quickly for the asking price or more. Because of that, sellers these days often expect their home to sell in just a few weeks or even days. When that doesn’t happen, worry and doubt may start to set in. I had a past experience where I sold a home in just a few days. Conversely, I bought one that had been on the market for several months.

It’s natural to have an emotional attachment to your home, but this can cloud your objectivity in determining its market value – that is, what someone else will pay for it.

You may have information about what a neighbouring property sold for, but this is of limited use unless you are intimately familiar with the facts and history of that property, inside and out. For example, has there been extensive renovations, past water damage, a new roof, an extra bedroom?

The list price is your decision, but for the reasons just given, it’s wise to seek professional assistance when determining that price.

A registered real estate professional can obtain detailed information about the listing price, selling price and other attributes of the homes that have sold recently in your neighbourhood, and that information can be very useful. More importantly, a professional can help to interpret what all of that information means for you.

The limited interest in your home may be a function of more than just the price.  A sales representative can get feedback from those who have viewed the property or their representative. They can help figure out if the price is the real issue, or whether there are other factors, like the décor, the need for repairs, the landscaping, or the age of your home’s major systems, such as the furnace, electrical, plumbing or roof.

You should know that not all real estate professionals will have the same level of knowledge and experience to express opinions or give advice about the valuation of real estate.

In fact, RECO’s rules prohibit a real estate broker or salesperson from giving an opinion or advice about valuation unless they have relevant education or experience as a qualified appraiser.

Some real estate professionals are qualified appraisers – designated by the Appraisal Institute of Canada – so be sure to ask questions of prospective salespeople regarding their abilities in this area before you enter into a listing agreement.

You should also be aware that there are some differences between a Market Value Assessment (MVA) or Comparative Market Analysis (CMA) done by a real estate salesperson, and a formal appraisal by a qualified appraiser.

The MVA and CMA are intended to help you set your listing price.  The real estate salesperson is working on your behalf, in your best interests, and wants to help you get top dollar for your home. But, any advice about setting the list price will also reflect your needs and priorities, as communicated by you to your professional.

Appraisers are often used by mortgage lenders to determine value for mortgage purposes, regardless of the price that is asked or paid.

Some of the differences between an appraisal and other estimates of value can be, for example, in the level of detail, the sources of information used and the methods used in determining the estimate of value.

In short, if your home is unusual in some way or there hasn’t been a lot of sales activity in your area for comparison purposes, it may be wise to talk to your salesperson about getting a formal appraisal. You can then work with your sales representative to set a listing price that will hopefully be more attractive in the marketplace.

 

Contributed By: Joseph Richer - Registrar of the Real Estate Council of Ontario

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