Prime Edmonton Real Estate - During the previous decade, the market for residential Property in Edmonton, and across Canada, has seen significant change. We've had a lot of adjustments, which makes determining an accurate price difficult for many realtors. I mean, I'm frequently asked how much a House is worth, and on occasion I'm stumped. What is the value of a home? EASY (AND HARD) - WHATEVER A BUYER IS WILLING TO PAY However, one of the most frequent problems in real estate is that a customer will vastly overvalue their property, which can be costly. They believe they'll be able to reduce it later but can never raise the price. This is technically accurate, but this IS SO WRONG Getting the pricing correct is one of the most essential features of good working relationships between realtors and clients. We all know that when the realtor and the client are on the same page, it's much simpler to get a property priced correctly and speed up the transaction. Honesty is the Best Policy I always tell my clients that I will be completely honest and price the home correctly from the start. I'm not going to charge an inflated rate just to get a listing – I always turn down people who aren't prepared to pay a fair price. Because I know it won't go well for anybody as a result. If another broker gets the listing, it won't be a problem. The agent is going to ask for a price reduction within a few months. The seller will realize the home is overpriced and won't be happy. Here is what I tell every single potential client when I meet with them to sell their home… “You're going to interview a few agents in order to sell your house, and most of them may or may not tell you what you want to hear. However, if you don't price a property to receive multiple bids in today's market... the home will sit and wait, and sellers will be wondering what will happen. Now the buyers have power. The purchasers will now look at the house and think to themselves, "I don't see a line around the block to buy this property." If you lower the price of your home, you will only be hurting yourself. People often say this to themselves when they are selling their home. It is important to let the buyer make an offer so that they feel like they are in control of the situation. Now let's cut to the chase here: No one wants to make a low-ball offer. They feel the seller isn't motivated and is making an unreasonable offer. And no one wants to upset anyone by making an under-offer. People know what a home is worth these days that they are going to look at it before even seeing it, which isn't the case as previously. It's not like it was back in the day. And the statistics back this up, as well as my anecdotal experience. Buyers are more likely to simply walk away from a listing that they like (but think is overpriced). Over my 20+ years selling real estate, In general homes in the Edmonton area go for about 96.6-97.5 of the list price. With all of that in mind, I've developed a formula for how I properly value properties the first time so that my clients are happy from the start. While no individual is perfect, this method is the simplest way to ensure that the price of a property is easily configured and sold as quickly as possible. Factor 1: Square Footage and Building Type vs. Land Price When pricing a property, one of the first things I look at is the size of the house and its location. A very costly condominium or apartment will be worth far less in the long run than a smaller home with fewer features. Because you own the land with a house, whereas you do not with a condo property, this is true. And because land values rise over time, not building values It's critical for sellers to understand that the structure of a home isn't nearly as essential as its site. The most valuable asset in these high-value areas is usually the land. This is especially important when you consider the idea of infill homes in Edmonton, and creating multiple properties where a single home once sat. Next, I look at the square footage of the house and compare it to other houses in the same neighborhood. This is important because people want to get as much space as possible for their money. Factor 2: Location, Location, Location Next, I look at where the house is located. For example, a home in Parkview is going to sell for a lot more than a home in Parkdale. It may be fashionable to live in a certain area code, so it's critical to keep track of the latest trends and to understand not just which areas are popular, but also which types of homes within those regions are selling well. Location is a very important factor when it comes to real estate values.The location of a property can affect its value in a number of ways, including: - Proximity to amenities and attractions - Traffic and noise levels - Schools and universities - Employment opportunities - Crime rates I always advise my clients to pay for a better location rather than the nicer house, since in a few years the home with the great location is much more likely to be worth more than what they originally paid for it, while the home with the improvements will be worth less as the improvements age. Factor 3: Home Renovations vs Improvements This is when the customer spends money to improve the house to today's trends in security systems, smart appliances, and even saunas, wine cellars, and other features. There are a few different methods to increase the value of your property. Renovating the kitchen or bathroom, adding a deck or patio, and upgrading the flooring or windows are just a few examples. Each of these improvements has the potential to alter the value of your house. Kitchen remodels are one of the most common types of renovations, and they frequently offer a decent return on investment. A kitchen renovation may boost the property's value, and bathroom makeovers are also popular, adding to the house's value. Patios and decks are another popular renovation as well for those who like to maximize their time outside during the shorter Edmonton summers. I advise my clients to go big on renovations, or leave it alone. Nobody cares if you spend $5,000 to renovate your master bathroom–it's not that significant. However, if you concentrate on the primary rooms, such as the master bedroom, kitchen, and living room–you may vastly enhance the value of your home and get your money back many times over. Ideally, I advocate doing everything or nothing at all Factor 4: Luxury Amenities - Those Special Extras Count Although luxurious amenities are hit-or-miss for the majority of houses, they may be beneficial. While some properties are upgraded with the most up-to-date and cutting-edge technology, keep in mind that it is likely to become obsolete within as little as five years. As a result, most of the homes I sell might not have these features. These sorts of renovations can have a significant impact on a property's selling price. Factor 5: Interior Design The interior design (when done correctly) may frequently add a lot of value to the property's price. Fortunately, I studied interior design and know a thing or two about what works and what doesn't. Interior design may make potential purchasers feel as if they've just moved into their ideal house; however, outdated tiles, countertops, and other features may make the home appear too costly. Factor 6: Cost of Materials and Labor The expense of supplies and labor might influence the cost of your home renovation significantly. If you want to use premium materials and finishes, the cost of the project will rise dramatically. On the other hand, if you're willing to do some of the work yourself, you may save money on the entire project's expenditures. However, keep in mind that not all remodels are created equal. While a modest kitchen makeover may only recoup half to 60 of its cost at resale, adding an extra room or updating the entire floor plan may result in a return closer to 80 or 90. When budgeting for a home renovation, it's important to consider all of these factors in order to ensure that you're making the smartest investment possible for your home. By understanding what renovations add value to your property and which ones may not be worth the investment, you can make an informed decision about the work that needs to be done. So...What’s Your Home Worth? Hopefully this has helped you to think about how your home measures up to the current market. Of course, I’d love to help you find out exactly how much your home is worth, and give you the fairest assessment of what you can realistically expect when you are ready to sell. Even if you aren’t ready to sell today, it’s always good to have a general idea, so that it can help inform your decision making in the future. And even if you are looking to buy right now, this information can help you to look at the different aspects that you should consider when making a wise financial investment so that your new home can retain its value, or ideally, be worth more than what you paid for it.