What is the value of your house in today’s market? Unfortunately, it’s not an easy question to answer. If the last two years have taught us anything, it’s that the real estate market has its ups and downs, and prices can fluctuate wildly. 

Take 2022, for example. The year started with an unprecedented seller’s market, with houses selling within days of being listed at amounts far above the asking price. Fast forward to the middle of the year, and properties are sitting on the market unsold. How did everything change so quickly?

Various factors are at play. Rising interest rates and inflation have worked to cool the real estate market. More than ever, selling a house now comes down to price. If it’s too high or too low, potential buyers show little to no interest. However, the fluctuating market makes it challenging to know how much your home is worth.

How Do Most People Determine Value?

Without professional guidance, homeowners use several methods to determine what they believe their home is worth. Unfortunately, many of these are based on myths and outdated information. Here are a few examples we’ve encountered:

• Looking at the past. This happened frequently after the housing market peaked in early 2022. A house could be appraised at one value, but the onslaught of bidding wars artificially inflated the price, sometimes by hundreds of thousands of dollars. Now that the market has changed, you can’t rely on past information, even if it was only a few months ago.
• Listening to friends and relatives. Your family and friends want the best for you. They want you to earn top dollar when you sell your home. However, just because they sold at a certain amount does not indicate what your house is worth.
• What the competition is doing. Your neighbour may list their house at $2 million. The question is, did it sell? Or did it languish on the market for months? Basing your price on the competition is better than guessing, but it is still not an accurate estimate. You need factual data based on what actually sells.
• An outdated home evaluation. A home evaluation is a better indicator, but even those results can change. You can have a thorough home evaluation one month, only to find the value of your house has completely changed the next.

Knowing the value of your home is just the start. Here are some other things that can help you get the best return on your investment:

• Can a Local Real Estate Agent Sell Your House for More Money?
• How to Stand Out in a Changing Market
• 7 Home Staging Tips You’re Going to Love

Don’t Sweat the Shifting Market

Why would anyone rely on methods that overestimate what a property is worth? A changing market is tough on everyone. It’s hard to accept that a house will not sell for as much as it would have a few short months ago. 

However, it is not all doom and gloom, and there are many fantastic opportunities for both buyers and sellers, even in a slow market.

For example, at the time of this writing, a report by the Canadian Real Estate Association shows that the average house price in Hamilton and Burlington is down approximately 6% over the same time last year. 

A house valued at $1 million at the beginning of the year is now worth $940,000. 

To many people, it feels like $60,000 has disappeared right out of their bank account, but this is not the case. Why? 

First of all, housing prices fluctuate. They are down now but will inevitably rebound soon. Secondly, when you run the numbers, you can see that you haven’t lost anything at all. 

Selling at the highest price possible doesn’t mean much when you also have to pay top dollar to find a new home. We like to quantify success by your purchasing power for your next step, not just the raw dollar figure. For example, you might not like the news that your house is worth $60,000 less. But by the same calculation, the $2 million home you want to upgrade to has also dropped in value by $120,000. In this case, falling prices are working in your favour!

The next step is to sell your current property successfully, and that begins with a solid plan based on facts and data. How do you set a fair price that will attract buyers but still allow a decent return on your investment? Let’s take a look at the best tool in your arsenal, regardless of the market.

Does the news of a shifting market have you feeling stressed? Information is the best cure:

• How to Negotiate a Real Estate Contract
• The Steepest Interest Rate Hike in Decades: Should You Be Worried?
• Interest Rates Are on the Rise: Should You Get a Fixed Rate or Variable?

A Comparative Market Analysis: Your Most Accurate Tool

A Comparative Market Analysis is the number one resource real estate agents rely on to get an accurate estimate of the value of a home. It is meticulously detailed, looking at the residence itself, the construction, the age, the layout and past and current activity. Here is a breakdown of everything covered:

• The size of the home by square footage. Obviously, larger homes typically are valued higher, but there are other factors to consider.
• The layout of the home. Is it an open concept, or are the rooms separate? In the current market, younger buyers often prefer open-concept designs.
• What is the housing structure? It could be a detached family home, a townhouse, a semi-detached or a condo.
• How many bedrooms and bathrooms are in the home? Is the plumbing roughed in for an additional bathroom if the new owner wishes?
• How old is the home? The newer the build, the more valuable it is, as a rule.
• What renovations and improvements have been made? With strategic updates, the value of a resale home can equal or surpass a new build, especially in a desirable neighbourhood.
• Where is the home located? If parks, schools, transit and other amenities are nearby, it makes your home more appealing to many buyers.
• What houses have sold in your neighbourhood recently, and for how much? 

Again, we want to know how much a home actually sold for, not just the listing price. Your real estate agent will have access to these numbers.

The Importance of Current Information

As you can see, a knowledgeable real estate agent leaves no stone unturned to help you find the right price that will get you the best results. However, the market fluctuates, and the value of your home can change depending on supply and demand. If you had a home evaluation several months ago and then decided to wait to sell, your results may no longer be valid.

Fortunately, many real estate teams offer free home evaluations. Obtaining a competitive, up-to-date estimate can be just a phone call away.

Expert Negotiations Are Still a Must

Setting an attractive price point for your home is a critical first step. However, it is just the beginning. You will still need a real estate agent with extensive outreach who can market your home to the most likely buyers. And for the best possible results, you’ll need someone who can negotiate expertly on your behalf. The market can change in the blink of an eye, but a well-thought-out strategy helps you achieve a successful sale anytime.

At Woolcott Real Estate, we offer comprehensive home evaluations at no charge and with no obligation. Find out more about your options right here, or call us today at 905-332-9223 to book an appointment. We are excited to help you get the best results in any market!