Setting the Right Price: How to Determine the Value of Your Property
Posted By: Rachel Kavanagh
December 12, 2023
When selling your home, it’s important to maximize the equity you have built up in your property. Ideally, you’re selling in a high-demand market with rising house prices.
However, house prices are complex, with many factors impacting your listing price and what buyers are willing to pay for your specific home and location. Here, we look at what’s involved in determining the value of your property in Markham Real Estate and the art of setting the right price to see the most profit.
What Impacts Markham Real Estate Home Value?
Your area’s current, comparable home prices help set the bar for your home value. Known as “comps,” they reflect the price of the most recently sold homes in the area sharing similar features to yours.
When reviewing sales, the more current the better, however depending on the property you may need to go back many months to find the appropriate comparable.
The homes should be similar in size, with the same number of bedrooms and bathrooms, and comparable features such as a new or old kitchen, new or old bathrooms, ensuites, parking or garage, etc. The closer the proximity is to your home and the more features you share in common, the more accurate the pricing becomes.
If your home is unique, the comparisons would include the sales prices of homes sharing those features, such as a pool, a renovated loft, or something rare like a lake view or lake access.
You can establish a price based on the average of comparable homes and the specific unique elements that vary from the homes in your area.
Which factors influence comparables?
Some factors that impact current prices in your area may include:
Market Trend Analysis
A market trend analysis considers the following:
- Sales activity in your neighbourhood
- Neighbourhood demand
These factors can dictate a fair, generous, or lowball offer. For example, if you live in a high-demand area with a low inventory of listed homes, we expect to see offers above asking and the valuation based on comparables in the area.
Of course, the price would drop if the opposite were true.
We’re all familiar with the adage that real estate’s three most essential things are 1) Location, 2) Location and 3) Location. That’s why comparables are so important.
Prices vary greatly based on the neighbourhood. When located in two very different areas, two homes with the same features and in the same condition will fetch very different prices.
Type of Market
We experience buyer’s markets, where there are plenty of buyers and plenty of houses for them to choose from, and seller’s markets, where there are very few sellers and high demand from buyers.
Selling in a buyer’s market will decrease your home value, while a seller’s market will increase your home value.
The type of home you are selling also impacts the price. In most cases, single-family homes in Markham real estate demand higher prices than any other property.
However, a condo in a highly desirable area of Markham might attract the same level of demand than a single-family home in an undesirable area.
So, once again, location helps drive home values.
Home Age & Condition
Of course, buyers are looking for specific characteristics in a home, which include age and condition. Many buyers love the idea of an older character home, while others want something new and modern. A home in ill-repair that hasn’t been well-maintained will see a lower value than a home in pristine condition, regardless of age.
A big attraction for buyers tends to be a character home that has been completely updated, as it appeals to their sense of aesthetics while reducing the risks of any headaches and high-cost updates in the future.
Although renovations and upgrades are likely to demand a higher price, location and the type of upgrades influence the price.
Investing in renovations that don’t see as much return on investment is possible because you overshot the renovations for the area or the aesthetics are too specific to appeal to the average buyer. In these situations, renovations can negatively impact your home’s price.
Interest rates impact demand. When interest rates are high, buyers struggle to receive mortgage approval, so fewer buyers are interested in buying a home. It increases the competition among sellers, causing prices to drop.
When interest rates are low, more buyers can afford a house, which can increase demand and, in turn, increase home prices.
How to Determine the Right Markham Real Estate Price
Your best bet is to work with a real estate agent familiar with your area. Markham real estate agents at Benczik Kavanagh can research comparables and assess your home to determine your home value.
The right price is essential as it will help attract serious buyers, encourage acceptable offers, sell your house faster, and provide you with the most profit.
However, it is always advisable to conduct research so you feel more comfortable with your agent’s advice. You can also look into the following:
- Research prices for homes for sale in your area: When you spot a For Sale sign in your area, look up the prices online to see how they compare to your home evaluation.
- Look up your assessed value: Property taxes list your assessed value. It is often lower than fair market value but does provide a reasonable minimum amount for your home’s value.
- Keep an eye on the number of For Sale signs in your neighbourhood: If you see many For Sale signs on lawns in your area, you can expect a decrease in price due to plenty of competition and a possible lack of demand.
- Go to local open houses: It’s difficult to be objective on your home’s condition. Therefore, nothing helps you understand the market better than seeing what else is out there.
Open houses are the perfect way to research the competition and also see the types of buyers touring the home. It will explain why your agent might have valued your home lower than you’d hoped.
- Use online home evaluation tools: Many banks and realtors offer free online home evaluation tools. The tool lets you enter basic details about your home, and the calculator will provide your home’s value.
Markham Real Estate: Get the Most Value for Your Home
When considering selling your home, it’s crucial to speak to a real estate agent who understands your neighbourhood and has the experience to provide an accurate evaluation.
You want to ensure the current market will make the most of your home equity and give the down payment you need to reduce your mortgage payments for your next home purchase.
You can depend on the Benczik Kavanagh Markham real estate experts to provide an accurate price for your home. We are here to answer your questions and offer advice on how to maximize your home’s value. Click here to get started.