HOW TO PRICE YOUR HOME?!
If you're thinking about selling your home, inevitably, the question of how much is your home worth? Is going to come to your mind, if it doesn’t it should!
Assuming your using a Realtor, they will go through a process, typically called a ‘CMA’. Which is a ‘Competitive Market Analysis’. This analysis is in short, the gathering of market information to assign a price to your home. This process doesn’t change regardless of whether you live in a condo, house, bungalow, hobbit hole or whatever. Commercial properties are a different conversation but we don’t need to go into that.
As with most homeowners, I’m sure you will want to get a heads up to think about what your place is worth. This typically involves a Google search, the birthplace of misdiagnosed medical conditions and over valuations of home.
So in just a few moments, we’ll get to what the steps that defines where your home value stands. Before we begin though, please don’t get this blog confused with a ‘how-to-do’ DIY list, INSTEAD of using a REALTOR. We ALWAYS recomend using a REALTOR as these steps will give you a guide into how they do it, NOT a replacement service.
FIRST AND FOREMOST PLAY WITH LEVEL HEAD!!!!
Of course you are going to want as much as possible for your home, you’d be silly not to! However you need to be realistic. If you saw a condo exactly identical to you on the market for $100,000 more than you thought it was worth, that doesn’t mean it’s the value! This leads us onto Step 1.
Step 1 - SALES
Sales are a KEY market indicator on where your home lies. For example, if their is an identical unit on the market for $600,000. However, all of the sales in the building for similar units sold for $500,000………. Guess what, your home is likely worth closer to that $500k than the $600k. Active listings mean something yes, but sales in this market are key and more important.
Sales are open information. If a buyer is looking at your unit and they search the building. They’ll see other similar units sold for $500,000 and how you’re asking too much. In this market, that’s enough to make 99% of people walk away and not even try an offer.
Step 2 - ACTIVES
So onto the Actives. They do play a part in a ‘CMA’ no doubt. They act as a comparison for one. It’s common for competition within the same building to exist in this market. So if you want to list your 1 Bedroom, 1 Bathroom 700 Sq.Ft condo, and there is already one listed for $500,000 in the same condition as yours. You will need to readjust your view on what your home is worth (up OR down).Now there are circumstances that will alter this, such as someone is RUSHING to sell, or one home may have a view and the other does not. This is where your REALTOR will advise why your price should be adjusted up and down. But it’s important here you remain calm still. Just because your 3 floors up, if you have the same view that doesn’t add $20,000 to your value without any other substantial changes.
Step 3 - Improvements/Differences
Your REALTOR will then take into account any upgrades you have made such as renovations, extra/lesser amounts of square footage, view etc.
These will then be compared to other competition and sales in the building/area. Again, the level head is needed. We totally understand you put $15,000 into custom upgrades of your unit and it’s special to you. However, it’s not to a buyer, they are entering cold and without any sentimental value. The comparables will show you what a buyer is actually willing to pay for such a home.
Step 4 - Don’t Assume
It’s easy to start looking at things you feel will make all the difference to your home value and apply a number to it. But it’s not always relevant, or if it is, not to the extent you’re thinking. For example, your 1 Bedroom, 500 Sq Ft condo could be in an AWESOME catchment area for a highly rated high school! Although good, it’s likely the buyer of your home is not a family who have children (of a high school age anyway). So that particular feature does not hold as much value as your inclined to think in your head.
The above steps make a VERY BRIEF overview of the process your REALTOR will go through to price your home. Currently, a lot of people are disappointed in the value of their home, but the reality is the market has changed. Your REALTOR wants your home value to be as high as possible too, trust us!! But there is a difference on listing your home at your desired value, vs what it will actually sell for. If you are dead convinced on a value and that’s what you want, we would suggest trying that price no longer than 2 weeks and readjusting to what the market tells us.
As always, thanks for reading! We want to bring you the cold hard facts and remove most of the fluff that can cloud the real information! You can always catch our podcast - The Vancouver Real Estate Audio Experience or watch our videos at Mcinnes Marketing YouTube
Until next week,
We thank you for your attention!
If you're thinking about selling your home, inevitably, the question of how much is your home worth? Is going to come to your mind, if it doesn’t it should!
Assuming your using a Realtor, they will go through a process, typically called a ‘CMA’. Which is a ‘Competitive Market Analysis’. This analysis is in short, the gathering of market information to assign a price to your home. This process doesn’t change regardless of whether you live in a condo, house, bungalow, hobbit hole or whatever. Commercial properties are a different conversation but we don’t need to go into that.
As with most homeowners, I’m sure you will want to get a heads up to think about what your place is worth. This typically involves a Google search, the birthplace of misdiagnosed medical conditions and over valuations of home.
So in just a few moments, we’ll get to what the steps that defines where your home value stands. Before we begin though, please don’t get this blog confused with a ‘how-to-do’ DIY list, INSTEAD of using a REALTOR. We ALWAYS recomend using a REALTOR as these steps will give you a guide into how they do it, NOT a replacement service.
FIRST AND FOREMOST PLAY WITH LEVEL HEAD!!!!
Of course you are going to want as much as possible for your home, you’d be silly not to! However you need to be realistic. If you saw a condo exactly identical to you on the market for $100,000 more than you thought it was worth, that doesn’t mean it’s the value! This leads us onto Step 1.
Step 1 - SALES
Sales are a KEY market indicator on where your home lies. For example, if their is an identical unit on the market for $600,000. However, all of the sales in the building for similar units sold for $500,000………. Guess what, your home is likely worth closer to that $500k than the $600k. Active listings mean something yes, but sales in this market are key and more important.
Sales are open information. If a buyer is looking at your unit and they search the building. They’ll see other similar units sold for $500,000 and how you’re asking too much. In this market, that’s enough to make 99% of people walk away and not even try an offer.
Step 2 - ACTIVES
So onto the Actives. They do play a part in a ‘CMA’ no doubt. They act as a comparison for one. It’s common for competition within the same building to exist in this market. So if you want to list your 1 Bedroom, 1 Bathroom 700 Sq.Ft condo, and there is already one listed for $500,000 in the same condition as yours. You will need to readjust your view on what your home is worth (up OR down).Now there are circumstances that will alter this, such as someone is RUSHING to sell, or one home may have a view and the other does not. This is where your REALTOR will advise why your price should be adjusted up and down. But it’s important here you remain calm still. Just because your 3 floors up, if you have the same view that doesn’t add $20,000 to your value without any other substantial changes.
Step 3 - Improvements/Differences
Your REALTOR will then take into account any upgrades you have made such as renovations, extra/lesser amounts of square footage, view etc.
These will then be compared to other competition and sales in the building/area. Again, the level head is needed. We totally understand you put $15,000 into custom upgrades of your unit and it’s special to you. However, it’s not to a buyer, they are entering cold and without any sentimental value. The comparables will show you what a buyer is actually willing to pay for such a home.
Step 4 - Don’t Assume
It’s easy to start looking at things you feel will make all the difference to your home value and apply a number to it. But it’s not always relevant, or if it is, not to the extent you’re thinking. For example, your 1 Bedroom, 500 Sq Ft condo could be in an AWESOME catchment area for a highly rated high school! Although good, it’s likely the buyer of your home is not a family who have children (of a high school age anyway). So that particular feature does not hold as much value as your inclined to think in your head.
The above steps make a VERY BRIEF overview of the process your REALTOR will go through to price your home. Currently, a lot of people are disappointed in the value of their home, but the reality is the market has changed. Your REALTOR wants your home value to be as high as possible too, trust us!! But there is a difference on listing your home at your desired value, vs what it will actually sell for. If you are dead convinced on a value and that’s what you want, we would suggest trying that price no longer than 2 weeks and readjusting to what the market tells us.
As always, thanks for reading! We want to bring you the cold hard facts and remove most of the fluff that can cloud the real information! You can always catch our podcast - The Vancouver Real Estate Audio Experience or watch our videos at Mcinnes Marketing YouTube
Until next week,
Jay Mcinnes
T: 604.771.4606
jay@mcinnesmarketing.com
Ben Robinson
T: 604.353.8523
ben@mcinnesmarketing.com