Homeowners who wish to sell their home or condo should know the fair value of their property to set the selling price and to negotiate more effectively. Sometimes, homeowners will set the price according to their own calculations. This method is feasible, but not foolproof.
Many people rely on the municipal assessment to set their property’s market value. Bad idea. The real estate market evolves every day, whereas the municipal assessment services, bound by bureaucracy, are slower. Consequently, there is a gap between the fair price of the property and the municipal assessment. Oftentimes, this assessment is inferior to the true property price. The municipal assessment reflects the fair value of the property, but not the value itself.
Some rely on a very popular practice: finding a property that is similar to theirs that has been sold, not too long ago, in the same neighbourhood. The property must be, if possible, identical or nearly the same. Same type of home, same year of construction, same living space, same lot size, same outdoor layout (pool and other installations), etc.
There are so many variables. Some can go unnoticed because they cannot be verified. For example, did the homeowner undergo major renovations inside the home? If so, what materials did he or she choose? Which room was renovated? Just like the municipal assessment, the comparative approach reflects the property’s value, but not the value itself.
However, the municipal assessment combined with the comparative approach gives an excellent overview of the fair property value. Moreover, the real estate broker who works in the area will be able to confirm the price. Lastly, combine these methods to market analysis platforms on the web.
If you wish to get the fair value of your property to better plan your negotiation strategy and to fix a selling price that will bring you the maximum profit, the best way is to turn to a certified appraiser.
The appraiser will carry out a thorough analysis of your property and will provide you with a detailed assessment. The seller can use this report as an argument towards negotiating with future buyers who will do anything to lower the asking price.
The certified appraiser is reliable as long as he or she is a member of a professional body. He or she is the ideal professional to assess a property. Municipalities rely on the services of certified appraisers.
If the mortgage of a property on sale is still outstanding, the homeowner will get the net value of the property by subtracting the mortgage balance from the property’s market value. If the house is worth $700,000 and the mortgage is $150,000, the net worth is $550,000.