When selling your home, you want to get the maximum price and the best possible terms. Many are surprised to realize that achieving this has nothing to do with how much you love your home, how much you originally paid for it, what it would cost to build today, or what other homes in different neighbourhoods are going for! Market value is simply defined as 'what the market will bear'.
Obviously, what the market will bear changes depending on the current real estate climate in your area. The most significant factor has to do with the current inventory of similar homes for sale in your immediate neighbourhood. The fewer similar homes for sale around you, the less competition you have, which generally means you can command a higher sale price in a shorter period of time than you'd be able to, if there were a For Sale sign on every second home on your block and not enough buyers for them all. The only time standing alone can be a negative is if you own a very unique type of property for the area, one that only a very specific type of buyer would be interested in purchasing. Your property may then take longer to sell than a more popular model would.
Cartoon house by Stefano A
You might be surprised to learn that the ultimate sale price of a home can be completely different than its assessed value for tax purposes – especially in the case of a brand new community, or if an assessment hasn't taken place since major market changes have occurred, or if significant renovations/additions have been made to the property since it was last assessed.
Your Home's Saleability
If your home is older, has had any suspected or confirmed problems, or you have done a significant amount of upgrading, you may want to take advantage of the services of a professional home inspector (the fee is typically $400). A Calgary home inspection typically includes a close look at your plumbing system, HVAC system, electrical system, structural, exterior, insulation, appliances, windows & doors, building envelope, roofing etc. The goal is to detect pests, air/vapour/thermal/rain leaks, and the like. The inspector will usually encourage you to attend the inspection from start to finish and will explain any defects found in the home, offer you maintenance and repair tips, and answer any questions that may arise during the course of the inspection.
Other ways to get a good idea of your home's saleability and how it stacks up to similar area homes include:
- Checking online listings for the prices of homes that have recently sold in your area; pay attention to lot size, number of bedrooms and baths, renovations, layout, and amenities such as swimming pools
- Looking at homes that are currently for sale in your area (visiting open houses, or browsing virtual tours, pictures & information online to see what these homes have and don't have compared to yours)
- Comparing price per square foot, which is a time-honoured method of real estate valuation that is used primarily in pricing Calgary condos and new home builds
The Comparative Market Analysis
As the name suggests, this tool involves a detailed comparison of your home to other similar homes in your neighbourhood to arrive at a reasonable asking price. It's best prepared by a real estate professional with a lot of experience selling Calgary homes and access to the most up to date, accurate reporting information and data on Calgary home sales. If you're already worried about how your home will measure up to the neighbours', don't be: what you know about your home is always better than what you don't know about it!
Even if you're not planning to sell your home right away, we will be happy to prepare a comparative market analysis (CMA) for you as a free service, based on our extensive experience in the Calgary real estate market. You'll then have this evaluation to use as a starting point, plus recommendations as to any repairs or renovations you might need to do to get that asking price higher – so that when the right time comes to sell your home, you'll already have an idea how much it is worth. Warning: CMAs do have a shelf life! If yours was prepared more than 3 months ago, it's time to take another look; when it comes to market conditions, what's happening now is all that matters.
Here is how a CMA can help you arrive at a reasonable dollar amount starting place for your home:
- Considers comparable recent sales – those that most closely resemble your home in terms of size, age, type, amenities, upgrades, general condition, and of course the big one: location
- Considers active listings, which make up your direct competition for buyers looking in the neighbourhood right now
- Considers listings that expired or were otherwise taken off the market recently; examines possible causes