What's My Edmonton Home Worth?
All sellers want to sell their home for the highest possible price in the shortest period of time, and understanding what your Edmonton home is worth is a crucial first step.
While it may seem counterintuitive, the property's assessed value is rarely a true reflection of what a home is actually worth. Instead, in real estate terms, your home is worth what people are willing to pay for it--otherwise known as the "market value"! In eloquent terms, market value is the price a property will sell for within 30 - 90 days in its current condition.
Determining Your Edmonton Home's Worth
The best way to get a feel for what your home is worth is through a comparative market analysis (CMA). A CMA is a process in which an appraiser or real estate agent looks at the property and compares it to other similar homes on the market that have recently sold.
Did you know? A CMA often costs hundreds of dollars to complete but Paranych.com will do yours free! Check out our Free Market Analysis here!
The three factors that essentially determine your home's value are the specific location, the current condition and the 30 - 90 day guidelines.
Your location has a direct impact on the value of your house. Two identical houses in different neighbourhoods can vary in price by quite a significant amount. We've all seen examples of this on a larger scale, where an apartment in Vancouver is unaffordable just because of its desirable postal code. The same thing applies on a smaller scale with neighbourhoods, where the exact location of your property directly impacts its value.
The current condition of your Edmonton home will also have a direct impact on what it's worth. Homes that require a significant amount of repair or costly improvements will automatically be less valuable than those in new or like-new condition.
As most buyers also don't enjoy doing renovations, they will expect a lower price-point to compensate for the investment of required repairs. Many home buyers will consciously or even unknowingly subtract the price of necessary repairs from their perceived value of your home. Sometimes the expectation exceeds even the value of the repair, and sellers have to dip their price even lower just to intrigue buyers.
In addition, homes that do require work will traditionally take more time to sell as they have less buyer interest in general.
30 to 90 Days
The 30 to 90 days metric comes from the amount of time it takes a home to sell in most markets. The majority of properties should sell within 30 - 90 days of being listed, if the property was priced properly. A home that takes too long to sell would be considered overpriced, while a home that sells too quickly may have been underpriced. Just note that homes also sell quickly when buyer competition is high.
Use A Professional To Determine Your Home's Worth
We always recommend working closely with a professional to determine what your home is worth. After you receive a comparative market analysis, talk to a real real estate agent to get a second option.
An agent has insight and knowledge that a software program couldn't have, and they can also make adjustments for your personal situation. Perhaps a slightly lower price is worth an immediate sale if you're relocating, or maybe you're just testing the market and want to try a higher price to see if you get any bites.
How Markets Impact Real Estate Worth
The real estate market is always in flux, and buyer interest always has a direct impact on what a home can sell for. You've probably heard the terms buyer's market and seller's market, which is colloquial way of indicating who the market is in favour of. But it's important to understand what these supply and demand terms actually mean:
- Buyer's Market: A buyer's market means that there are more houses than demand, creating less competition and urgency for buyers.
- Seller's Market: A seller's market occurs when the demand outweighs the houses, creating higher competition and urgency for buyers.
Another less heard of term is a "balanced market", in which the buyer demand and seller offerings are fairly equal.
Any market scenario will impact the value of a property, but only within reason. It's critical to have a properly placed home in any market to ensure your home sells quickly but also for the best possible price. A house that is priced too high won't even be seen by buyers, while one that is priced too low will sell fast but at your profit's expense.