Home Values What is your Toronto Home Worth in Today’s Market?
That’s the million-dollar question these days. With a systematic approach to determining home values, your Real Estate Broker can help you by developing a clear picture of the current market for your property.
The following are the major factors that should be taken into consideration:
- Current Listings
- Sold Listings
- Expired Listings
By looking at properties currently listed in your Toronto neighbourhood, you can get a good sense of what alternatives a serious buyer has to choose from. Homes on the market that haven’t sold yet are definitely a consideration, although not a strong one, since it’s unproven whether that house will bring the money it’s asking. But, it’s always wise to look at the active competition in your area. Identify homes most similar to yours and find out how many days they’ve been on the market. If the house has been sitting for a while (more than 30 days), this tells us that the market is likely not convinced that is the correct price for that home. Once you see the “Sold” sign go up, your Broker can update you on how much above or below the list price it sold for. Since the Toronto market is not static, this current “snapshot” will give you a strong indication of how the market is behaving and how aggressive you can be in setting your
After sizing up the current landscape in your Toronto neighbourhood, comparable properties that have recently sold play the most important role in setting your price. Considered part art, part science, “comps” are regarded by Real Estate Brokers as the single-best tool in determining a home’s value. When selecting properties that you believe to be comparable to your subject property, consider the following:
- Statistically, sales far above or far below the bulk of the group are suspect. There likely are valid reasons for these “outliers”.
- Make sure you & your Broker can justify comps not used. If you decide a comparable is not appropriate, have a good reason and be prepared to back it up.
- Choose only comparable properties from the your property’s neighbourhood or as close as possible. Buyers will be considering the same schools, transit, parks, cafés, shops and restaurants
- Use sold comparables that are not too old. Stay in as current a time frame as possible (six months should give you a good market overview, however you may need longer if there hasn’t been much activity)
- When quantity permits, use similar construction types only.
The expired listings are also extremely useful as they give us an indication that they could be off the market as a result of overpricing, the property being in a state of disrepair, or other similar “outlier” factors.
It’s a well known “secret” in the real estate industry that there are never enough good homes to go around for the number of serious buyers. Sure, there may be homes for sale, but the really good homes in the best Toronto neighbourhoods always sell first.
If you’ve thought about selling, it’s a good idea to know the value of your home before you put it on the market. I provide all my clients with an estimate of value periodically to ensure no surprises pop up when it’s time to move.
If this approach makes sense for you, call or email me today. We can set up a time to meet and I can then provide you with everything you need to know to be an informed homeowner.