As a broker my job is to show you what your house will sell for now. We will look at a range of prices being paid for homes similar to yours in our area and then adjust the different features which will show us what price range your home is in.
The market determines what the house will sell for.
I or no one else can tell you what your home is worth.
“What will our house sell for?”
Proper Pricing
Better response from marketing
Increased salesperson response
Less negotiation
Attracts higher offers, means
more money to you
Less time on the market
Less inconvenience
Avoids being “shopworn”
Let the market chase you
Don’t chase the market!
Who Controls What?
Selling Factors
Who Controls
Location
Marketing
Condition
Price
Given
Broker
Owner
Market
By comparing your home to other homes sold and for sale at the time. Buyers still determine the price they wish to pay for a home by comparison shopping.
How do buyers determine price?
TODAY
Rising
Flat
?
?
T I M E
REAL ESTATE
VALUES
What is the Current Market Trend?
Falling
Criteria Most Likely to Influence Value
Location (street) House size (sq.ft) Lot Size (sq.ft) Main floor family room Extra Bathroom
Extra Power Room Extra Bedroom on Main and Upper Floor Garage vs None or Extra Garage Finished Basement vs Partially or Unfinished
Items that Improve Salability & Offer ReasonableReturn on Investment
Renovated BathroomRenovated KitchenFireplaceHeat PumpExtra Bedroom in Basement
Renovated Powder RoomNew WindowsCentral Air ConditioningForced Air Heating
Criteria Most Likely to Influence Value
Items that Improve Salability & Offer Slightly LessReturn on Investment
Wood FloorsPatioNew FurnaceNew SidingDeck
FenceCar PortWood StoveSolarium
Items that Improve Salability & Offer MinimalReturn on Investment
RoofCeiling FanCarpetingCabanaCentral VacExtra ClosetsLinoleumFloating FloorLight FixturesPaintingGarburatorUpgraded PlumbingSprinkler system
Satellite DishInground PoolCeramicSkylightUnistone Driveway
RepavingIntercomBrick PointingUpgraded ElectricAlarm
Principles of Substitution
I need to get my costs out of it…
VALUE $450,000 VALUE $___________?
Value is determined not by what the owner has in a
property…It is determined by what a purchaser gets out of it…
Value of Improvements
What about the value of my improvements?
When were the improvements made?
?
?
?
?
At that time, were you planning to stay or move?
If you’d know you were moving, would you still have made the improvements, or spent as much on the improvements?If improvements were removed, how much would today’s buyer pay to have them put back?
“They Can Always Make an Offer”
If you overprice…
The right buyers won’t see it. And the higher priced buyers won’t want it…
Asking Price
Value
Buyers
Search Homes to Show by Price Range
Real Estate Brokers don’t determine what buyers BUY, they determine what buyers SEE…
If your home is priced even $1 higher than their target price range, it won’t be on the show list…
“Couldn’t we just try it for a couple of weeks?”
SHOWING
ACTIVITY
TIME
When selling a property above the
market, time IS NOT on your side!
The Best Offers are Usually the First Offers…
%
OF
ASKING
PRICE
TIME
100%
“We want to test the market”
The Comparative Market Analysis was the Test…
Comparative Market Analysis
123 Main Street,Any town, Quebec,
J0P 1P0
“We are moving to higher priced area”
$425K $825K
Local Market Destination Market
Your destination doesn’t affect the value of your
home… The market does!
“We’ve had a higher appraisal”
MARKET VALUE OF THE PROPERTY
What buyers are paying…
$$
+ ADDED VALUE
- NEGATIVE VALUE
• Inaccurate comparables• Timing• Insurance Assessment• Bank Refinancing
• Inaccurate Comparables• Timing• Bank Mortgage
Progression & Regression
Progression
Regression
Regression : The Value of a larger home is reduced by the influence of smaller surrounding homes.
Progression : The value of a smaller home is increased by the influence of larger surrounding homes.
