Market value is the highest price estimated in terms of money that a willing and well-informed Buyer would be warranted in paying, and a willing and equally well-informed Seller would be justified in accepting for a property, if placed on the market for a reasonable period of time, with both parties acting free of compulsion or duress, and with all rights or benefits inherent in or attributable to the property included in such value.
There are five major factors that influence your listing price: location, timing, competition, condition, and terms. Location speaks for itself. Timing is very important because buyers are thinking about schools for their children and they generally prefer to synchronize the move with the beginning of the school year. In terms of timing, another issue is weather. People prefer not to battle a snow storm to view homes and conversely, they do not enjoy searching for a home in sweltering heat.
The third factor to consider is the competition: similar properties that are currently on the market. Buyers will view all similar homes in the neighbourhood and their decision will come down to which home offers them the most for the least amount of money. If your home is not priced with the market in the area, the other homes will sell first and you will have facilitated this circumstance by not competing.
The condition of the home is crucial in the buyer’s decision making process. Remember that the market is being fuelled by interest rates, in my opinion. Because interest rates are so low, many more people can get into the market. However, renovation money is not so accessible, especially for the first time buyer who is using all their money to be able to qualify for the mortgage. Therefore, if the home is in good condition, the buyer’s decision becomes a whole lot easier. And don’t forget the appraiser. The bank will send in their appraiser prior to approving the mortgage. If it does not appraise for the price the buyer agreed to pay, the buyer will have to come up with the shortfall or not go through with the transaction.
Finally, the terms of the transaction are significant. For example, if the buyer offers you your high price but makes it conditional on selling his present home, you may lose momentum if he fails to sell his home. You would be prudent to appeal to the majority of buyers by offering your home at a price that is congruent with the market in your area for similar homes.
If you would like some thoughts and ideas about listing your home, do give me a call.
Carmel Kidd
Phone: 416-505-7513
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