We use one of three methods to determine the value of a piece of real property. Replacement, Cash Flow Analysis or Comparable Analysis. With respect to your average single family home the most accurate method is comparables analysis. This is when we search for homes of similar style, size, age, in similar neighbourhoods comparatively and use them as a yardstick to measure your home by. If a similar home has sold for x and your home is exactly like x within the same area and market conditions then your home will most likely sell for x.
While this method is easy to explain it is more challenging in some cases to implement. There are often times not perfect comparables with which to measure the value of your home or the market conditions at the current time are different from when the comparables were sold. So there is a degree of speculation that comes to play and adjustments need to be made. This is where experience and understanding of the current market climate is essential to garnering an accurate assessment of the potential sale value of your home.
Outside of taking into consideration the method we use to assess value, it is important for a Vendor to choose a perspective Realtor based not on who presents them with the highest list price but based on the Realtors process and who more decisively explains how they came to the conclusion of that number.
The actual process that you should expect from a Realtor is that they come into your home first to gather information, then come back at a later date to present the findings of their research. During the first appointment there shouldn't be any discussion, it should be a fact finding mission. The Agent should take measurements of your entire home. Take photographs for their file. Request a copy of your survey and a detailed list of any improvements or deficiencies that exist in the home.
The takeaway from this video is to watch your Realtors process, and listen to your Realtors explanation of their opinion of the value of your home. You should interpret that explanation to determine, do they really know what they are talking about or does the number have merit or are they just pricing the home high to get the listing. You want a Realtor that is honest and forthcoming and not just going to tell what you want to hear and you should be able to witness an intelligent process involved in determining the value of your home.
I'm Jerry Boyles, a Realtor with Coldwell Banker. Thanks for watching. Please feel free to email me with any questions at Jerry@AskTheRealEstateProfessional.ca or contact me directly (709) 693-0588.
You can also find me on Facebook at www.AskTheRealEstateProfessional.ca.
