Getting ready to sell your house or buying a new home is one of the many reasons why you need to figure out how much your home is worth. Unfortunately, when coming up with an amount – what the seller spent on renovations, the number they need to get even, the buyer’s budget, the asking price on MLS listings, or even the sentimental value it holds – it plays no part in crunching numbers for it to sell. 

Three things that can determine this: what the seller, buyer, and professional praiser think it’s worth. The underlying factors that influence this decision, on the other hand, are what you need to determine to help you prepare to buy, sell, refinance, or tap into your home’s equity. Here are things you should consider:

Choose the best comparable sales

When you’re a buyer looking for-sale homes, the best way to reach an appropriate amount that can make you and your seller happy is to compare the price range of similar homes in that area. You can ask your agent for more details, such as the size and amenities to help you paint a clearer picture of how the amount came to be. 

Some factors need to be considered as to why the comparables are set at a high or low price despite its similarities, may it be through an emergency, inconvenient location, rare instalment of amenities, and the likes. Nevertheless, it all boils down to these elements that make or break an accurate comparison: the location, amenities, and age of the house.

Dig deeper into the home’s value

You can ask for it from your agent, but assessing the value of a house is best done by a certified assessor. They will be responsible for comparing other properties in your area and use other factors such as the current market conditions, maintenance cost, depreciation, home improvements, neighbourhood, size and other factors that are important to achieve an accurate estimate. 

You can check with your local government if the features of the house are assessed correctly as you have up to 30 days to challenge the bill if you deem it necessary. This isn’t recommended, however, to those who are buying or selling in a hurry as an appeal could take as long as a year to resolve.

Find homes in the local market

Even when the house you’re looking at is in mint condition, the best possible location, and contain premium upgrades, the impact of your home value may still change depending on the number of other properties in the area as well as the number of prospective buyers. When a market has few buyers with many homes still waiting on the line, it leaves more room for you to negotiate on the home’s price. This will take longer to sell; likewise, a seller’s market is where houses tend to sell quickly. 

The Bottom Line

Reaching an accurate estimate on real estate valuation is a critical step for mortgage lenders, investors, insurers, buyers, and sellers before they can invest in the property. To make the most out of your money, it’s best to invest in professional appraisers as they can take you step-by-step into where your cash is flowing, but it’s better to understand the basics of how it works for you to get a good grip on what makes a real property valuable in the first place.

If you’re looking to buy real estate in Toronto, get in touch with us today – we’re happy to help you find a property that suits you.