What's My Real Estate Really Worth?

by PJ Wade

If a number immediately popped into your head when you read this question, I have a few more questions for you:

• How did you arrive at that value—detailed research, neighbourhood gossip, property tax market assessment or a comparative market evaluation from your local real estate professional?

• Why do you think real estate value for a specific property can be represented by one number and not a range of values based on the variety of value factors and prospective buyers for your property?

• How important is it for you to know the value of what is probably your principal asset and, therefore, to understand your full real estate purchasing power in this market?

• What are the consequences of being wrong about the value you're so sure of?

If you have no idea of your property's value or little confidence in what you know, why have you not taken advantage of free opportunities to determine the current market value of your real estate?

Real estate brokers and salespersons routinely offer their services free of charge to property owners. Received a "free market evaluation" certificate by mail or email lately?

Although there is no set definition of what a market evaluation should include, there are basic ingredients that can be useful in evaluating your position and the services offered by local real estate professionals:

• Solds: A property is worth exactly what a buyer is ready to pay for it. Analysing actual solds for your location and for properties similar to yours in surrounding neighbourhoods will provide solid ground for establishing value.

• Expireds: These are listings which terminated at the end of the usual thirty- to ninety-day period without a sale. Expireds are typically considered to be over-priced for the market, based on the condition of the property and current buyer patterns. These listings can also represent insight into marketing strategies to avoid or to adopt in your area.

• Currents: If your property were listed, how would it compare with the other houses or condominiums that buyers shopping that location or that price range would be shown? It's buyers' needs, wants and what's "in," not sellers' costs, that determine value.

• Value Boosters: Repairs, modernizations and improvements to your property can boost value. The real estate professional will offer some simple, cosmetic suggestions and others which may involve investment with a predictable return. Listening to these suggestions is the beginning of learning to separate pride of ownership from investment realities. What you love is not necessarily what buyers will pay top dollar for in your location. For instance, a swimming pool can devalue a property in some neighbourhoods. In others, this amenity is highly prized. Inground versus above-ground can also make a value difference.

• Value Range: Using solds, expireds and currents, you'll be led through the process of determining a range of value for your property. The real estate professional will explain why market value is a range rather than an absolute value. The relationship between that value and property-tax market value will also be discussed since local variations are significant. The value range will be evident to you after this buyer's-eye-view evaluation.

• Selling Costs: It's not the list price, or even market value, but what you would net, or keep in your pocket, that is really important. Typical costs will help you fully appreciate what value in an offer will mean to you.
  
  
  
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