Selling Kamloops Real EstateHome Seller's Guide > Getting Ready > How to Determine Your Home's Worth

 

KAMLOOPS REAL ESTATE

HOME SELLER'S GUIDE: YOUR HOME'S WORTH


Home's worth

While home sellers differ in the reasons they want to sell their Kamloops home, they all have one thing in common—the goal is to sell their home, fast, and for best price possible. Before you list your home for sale you have to establish a price. But prior to this step, you need to have some idea of what the house is worth! This usually is not the amount you bought it for or how you've since upgraded your home. Rather, the worth of your home really depends on the price potential buyers are willing to pay. This translates into the market value of a home.

The term market value is a broad and confusing term. When it comes to determining fair market value on a home, we often say that "the market value is the price at which a specific house, in its current condition, will sell within 30 to 90 days."

SPECIFIC HOUSE

Market value is limited to your specific house. The location and neighbourhood for your specific home is the starting point for this determination. The exact same house in another city, or another neighbourhood, doesn't matter. Home prices can fluctuate significantly from city to city, and from neighbourhood to neighbourhood. Therefore, when considering the market value of your home, it must be compared to similar homes in the same or adjoining neighbourhoods.

CURRENT CONDITION

The second factor in determining market value is the condition of your home. Is it in "showing" condition? Does it need some improvements? The condition of your home determines the number of buyers who may want to view and purchase the property which directly relates to the time your home will remain on the market before it sells. Most home buyers want a reasonably-priced home in good condition.

Home buyers may look less favourably on a home that requires major work and as a result they tend to take longer to sell. To attract more buyers, the price may have to be reduced beyond the cost of the repairs. In the end, it's all a matter of how much someone is willing to pay for these repairs. Determining market value of a home that needs some work is not an exact science. Some real estate professionals suggest subtracting approximately two to three times the amount of the fix-up costs.

30 TO 90 DAYS

In most markets a home will sell within 30 to 90 days. If it doesn't, the price is probably too high - even if the home is "perfect". On the opposite end, if a house sells within a short period of time, either the asking price was too low or the market could be hot. If the area is experiencing housing shortages, or there is a fear of rising prices, many homes are purchased within a matter of days of the listing. Ask your REALTOR® what's happening in the market before you buy or sell!

Remember, to determine a home's value most people turn to an appraisal or a comparative market analysis. An appraisal conducted by a certified appraiser is a professional opinion of a property's market value based on recent sales of comparable properties. On average, this type of evaluation costs $300-$500 and most lenders will require it as a part of the mortgage application process. Note that a comparative market analysis performed by a REALTOR® is a free and informal estimate of market value based on sales of comparable properties.

A Professional Opinion Is Essential

The landscape of the Kamloops real estate market is always changing. This includes both Kamloops as a whole as well as the specific neighbourhood. Many factors determine the value of a home, including type of market, market conditions, recent sales in the specific neighbourhood, present condition of the home, the urgency to sell, financing, additional items (such as redecorating allowance, appliances, etc.), and outstanding repairs.

  • In a buyer's market, the supply of homes for sale available on the market exceeds demand for those homes. In this case, buyers will take their time in choosing a home, and when they negotiate, they have more leverage.
  • In a seller's market, the number of potential buyers exceeds the supply of homes for sale on the market. Prices may be higher or perhaps climbing. Buying decisions must be made quickly, and conditional offers may be rejected.
  • In a balanced market, the number of homes on the market is roughly equal to the demand from buyers. Homes sell within a reasonable time period. Prices generally remain stable. There's less tension among buyers and sellers, and there's a reasonable number of homes to choose from.

Price is very important when you're selling your home. A REALTOR® can help you establish a fair "worth" as they are trained professionals who have certification in numerous areas, including real estate law, economics, marketing and professional practice. Usually the price of a home is set slightly higher than the worth to give a little bargaining room. Also keep in mind that when you list with an agent, you're entering a legal relationship. When you sign the listing agreement, you give your agent the authority to put your home on the market for a specified time period. If the house sells during this time, you must pay the agent the agreed commission. Additionally, if the homes sells shortly after the specified period in the contract, due to the agent's efforts, you must also pay the commission.