Most home owners have a general idea of the value of their property. However, seller’s often think that their home is worth more than the other properties in the neighbourhood because of their personal attachment to it and how they perceive their property stands out from the rest. This is a common mistake that seller's make, evaluating their property value too high. This usually results in the property sitting on the market and potentially going unsold for an extended period of time and inevitably a price reduction has to take place.
Most Buyers start their search for properties online. Pricing your home correctly is imperative in order to gain the maximum exposure. Assuming your home’s Market Value is $605,000, since most buyers search in increments of $10,000 or $20,000, listing your home at $605,000 could prevent your listing from being seen by buyers who are searching for homes in the $580,000 to $600,000 range. Pricing at $600,000 will certainly generate more traffic to your listing and possibly even a bidding war to help move that price above your expectations. However, caution must be taken when pricing your home well under Market Value in an effort to stir up excitement and a multiple offer situation. This could backfire and lead buyers to think that your home’s value is only worth the list price.
Another very good reason for knowing your home's value is if you are applying for other loans. Some loans such as business loans may require you to use your house as collateral. Or in the case of a home equity loan, which is a second loan on top of your existing mortgage, the bank or financial institution will require proof that the money it will lend you is supported by the current market value of your property. There are many reasons why homeowners refinance (which means you are actually replacing your current mortgage with a new one) securing a lower interest rate is one of the main reasons. Shortening the term of your mortgage, converting from fixed to variable rates or vice versa and of course consolidating debt. Perhaps your property’s value has changed since you first bought, if it has increased, you may be able to get cash out as part of the refinancing. If the value has decreased however, you may have difficulty securing a new loan. If you are considering refinancing, take into consideration the costs associated, up to 3-5% of a loan’s principal, and if this is a wise financial decision for you. As with the original mortgage, you will be required to have a Home Evaluation or appraisal done on your property.
The expertise of a Real Estate Agent can provide you with an accurate estimate of your home’s current market value. With access to a vast database of information, analyzing comparable properties and recent sales in your neighbourhood, it’s easier for a Real Estate Agent to remain objective and price your property at its fair market value. Whether you are looking to sell your home right now, or are just curious about your real estate investment and how much your property value currently is, a FREE Home Evaluation at no obligation can help set you on the right path to Selling or planning for a future Sale.
If you are interested in having a FREE Home evaluation done on your property, contact me to make an appointment today!