All homeowners want to know what their home is worth, especially in a market as hot as Toronto’s. What goes into pricing a home?
1. We Look at Historical Sales
You know what they say…the best predictor of the future is the past. When pricing a home, real estate agents and appraisers will look at recent sales on your street and in your neighbourhood. While we used to look at sales 12 or 24 months back, with a real estate market that’s as active as Toronto’s we generally look at sales in the past 6 months.
2. We Check out the Competition
If you’re thinking of putting your house on the market this week, then we need to know what potential Buyers are going to be seeing at the same time as they look at yours. When we (the BREL team) list a house or condo, we physically go see everything a potential Buyer will see – and recommend a price accordingly.
3. We Make Adjustments
When it comes to Toronto houses, no two are alike. Finished basements and second bathrooms add value, corner lots and next-to-no storage detract; detached houses are worth more than semis; the house backing on to the railway tracks is worth less than the one backing onto a ravine; the south-facing condo on the 10th floor is worth more than the west-facing condo on the 5th floor. Experienced realtors and appraisers know what value people have historically put on certain features and can adjust your price accordingly.
4. The Best Comparable
The best comparable home to yours will always be the one that is the most similar to yours in condition and size, is most closely located to yours and has sold the most recently.
5. MLS Data Only Takes Us So Far
It’s great to see pics and info about recent sales and current competition, but MLS data can be deceiving. If you’re working with a Realtor who knows your neighbourhood, they’ll know what those houses or condos REALLY look like and how yours compares.
6. The Economic Reality
Supply and demand drive prices – when there are too many buyers chasing too few houses, prices go up. Prices are further affected by prevailing interest rates and the overall state of the economy. Just ask any American homeowner in 2009 – it doesn’t matter how great your granite counter tops and hardwood floors look if 15% of the people in your city are unemployed and they owe the bank more than their house is worth.
7. The Demographic Wildcard
Who’s likely to buy your house? Will it appeal to a large number of Buyers or only a narrow target? How many Buyers who are out there right now want what you have to offer?
7. The Neighbourhood
Trendy neighbourhoods come and go…is your house in a HOT ‘hood? Is it growing or is it already mature? What new shops, services and transportation options are coming in? Has something negative happened (violence, poor school ratings) that will affect value?
8. The Value of Your Home is a Moving Target
What your house or condo is worth today is not necessarily what it is worth tomorrow, or next week or next year. As the factors that affect price change, so does the price you’ll get for your home.
At the end of the day, your home is worth what someone is willing to pay for it. But a lot more goes into pricing a home and an experienced Toronto REALTOR can make sure that you sell for top dollar.
If you’re wondering what your house is worth, give us a call or send us a message. We’ll happily give you a free no-obligation evaluation of what your home is worth in today’s real estate market.