April 12, 2012

Get a Market Evaluation - Even if You Aren't Selling


This is a post for the home owners (sorry renters, I'll give you some love soon).  I often mention that the townhouse is not our "forever" home.  We are selling this house, and leaving the city, within the next 2 years.  After about a dozen flyers for a free market evaluation were slipped into our mailbox over the course of a month, I finally decided to contact one of the Realtors to find out how much our house is worth.  Even if you aren't planning on selling, I highly recommend a free market evaluation.  

Here's what happened:

A well-prepped realtor came over.  He had looked at the original listing for this home (you can see before shots in the townhouse tour) and had seen our purchase price before arriving.  Once here, he toured all three levels of the townhouse and made extensive notes.  The three of us then looked at homes in this area that were currently on the market and what homes had been selling for.  He compared similar homes and carefully combed through photos and features to determine what would be a reasonable asking/selling price of our home.


Why it was beneficial:
  • The realtor pointed out changes we had made (like two bathroom renovations) that added value to our home (yay!)
  • He approved our "spit & polish" (as opposed to full renovation) of the kitchen and main floor half bath (yay!)
  • He told us NOT to paint the kitchen cabinets or brick fireplace, in order to keep the house more sell-able and appeal to a broad range of buyers (good to know)
  • He told us NOT to put any more money into our house to maximize our return (good to know, but we won't listen - we have basement plans, basement plans I say)
  • He told us that adding a shower to the 2 piece ensuite would have added tremendous value (oops)

MOST IMPORTANTLY:

He gave us a wake-up call.  Judging by the list prices of homes in our neighbourhood (and how much less updated they are than ours) we guesstimated a selling price (not list price) of about $10-15,000 more than what our home is worth.  Ouch.  That number may increase if the market holds for the two years we plan to be here, but it is really smart to no longer be banking on an amount we are unlikely to get.  Happily, the value of our home (thanks to some sweat-equity) has increased by about 25% since 2009!  Which is nothing to sneeze at.  All in all, it feels good to now know a more likely value of our house (for the moment, anyway) - I feel like we can plan our future better with this knowledge.

So, if you see a free market evaluation flyer in your mailbox from a reputable agent, give them a call!  I would highly recommend this before renovating, to get feedback on good investments to make (I might have added a shower during renovation).  Also, it's a great way to meet a potential selling agent in a low stress way.

17 comments:

  1. I am so happy you posted this! I often wonder how what my house is worth as I approach year 4 of living there. It's not that I've done anything to it to improve it drastically, but my neighborhood has been improving and I'm curious to know what that means for my house.

    I have to ask - what's in it for the realtor? Why do they offer this? I'm guessing the hope is that you'll list with them once the time comes? I'm so leary of the free stuff but it sounds like it can be totally legit.

    Thanks SO much for posting.

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    1. I think what is in it for the realtor is they meet (and hope to impress) you. They want you to list with them, ideally. Maybe not now, but maybe in the future. But our realtor (Remax) wasn't pushy, though.

      This type of exposure might lead to other business, too, which is a benefit for them. If someone asked if I knew a good realtor, I'd mention this guy and say he was well prepared.

      Also, he gets to see competition. If he lists my neighbour's house, he can say: well, some homes have done this . . . you might consider this . . .

      But pick someone reputable.

      Bonus? You can snoop and see what your neighbour's sold for. Hahaha. Best part.

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  2. This is so interesting and something we should definitely do soon before we dive farther in. I know we got a screaming deal on our home, but it's always good to know what we can do to maximize the return. This isn't our forever home either. More like 5 year home.

    Can you explain this a little more:

    "we guesstimated a selling price (not list price) of about $10-15,000 more than what our home is worth."

    I don't understand what that means. You made it sound like a bad thing.

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    1. It is a bad thing. Basically, we over valued our house. We have not put our house on the market, but we thought that when we do, we'd sell for about X amount of dollars, but in reality we will probably sell for about $10-15,000 less.

      It's not that we'll get more than the value, it's that we over-estimated what that value is.

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  3. We've been trying to get a market evaluation for the past SIX months! We've had two realtors - reputable based on their sales in the area - come by the house, take a look around, promise to drop off some comparables and then... disappear! They seem so eager too, but we never get past the initial visit.

    So, so frustrating. And surprising, especially since the market is so crazy in our area right now. You would think they would be working a little harder to convince us to sell our house. So far, it's not working!

    We'll keep pushing and hopefully get as much good info as you did. We're especially hoping for the "If we did this work, how would it help our home value" type of info.

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    1. What a shame! Our realtor did it right away. Maybe, when you schedule an appointment, ask for the info to be relayed at that meeting and not a later date. The one good thing about this, though, is you know what real estate agents NOT to hire and that is great to know at this stage.

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  4. Wow, Tanya, what an excellent article! I'm a renter, but I'm also a stager and this is the kind of information that potential sellers need to know about, and further embrace. The key thing you pointed out is the assumed worth vs. realistic value of a property. More often than not, a seller has an inflated expectation of what their property is worth, and that's usually fueled by what they have put into it, which is often not added value so much as owner preference for taste and style i.e. painting out the fireplace and kitchen cabinets. Definitely a fine line there. Again, a really fantastic post!

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    1. So true, Sheila! We fall in love with our spaces and think the awesomeness we are partial to is added value. I always saw folks on real estate shows go on & on about how much more their home is worth because of X features, while the real estate agent is shaking her/his head. Didn't think I'd be one of those folks, but now I know it's so hard to look more objectively at a home - esp. one with some DIY love put into it.

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  5. Timely. Or what? We've done moderate renovations as well in the home we've owned for 7 years, we're thinking about another 5 in it to go. Basement plans are on the horizon and I've really struggled with whether or not we'll see the kind of return me want on that kind of money-pit :) I am going to contact our agent (who has bought and sold a few properties for me). Smart Cookie!!!

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  6. Good post. It stinks that you guesstimated low on your end, but it really is good info to know.

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  7. Great article! The type of Remax agent that gave you a free estimate is very hard to come by. Realtors especially in the GTA are banking on in-and-out really quick. They might even convince you to under-list your property with the hope for either a bidding war, or a faster sale. I am not sure if I agree with the realtor about not painting the kitchen cabinet. Kitchen and bath are two key selling features of a property. Your house is so pretty with a nice flow of mid century modern, and the kitchen cabinets don't seem to fit into the overall design. Potential buyers that are attracted to your house will likely prefer a more modern kitchen. It's great to maintain some original characters of the house, but IMHO, kitchen cabinet is not the place to do so.

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    1. I imagine each market varies, but in Ottawa I have mit-fulls of free evaluation pamphlets from every real estate company imaginable. Friends in other cities have met great agents this way, too. But Toronto is a different climate. Perhaps smaller firms may be more open to meeting clients this way?

      My Hubs loves unpainted cabinets and I hate those gals who steam roll over their partner's choices so I painstakingly stripped and refinished our kitchen cupboards.

      They look so pretty in real life and garner a lot of compliments, so I'm happy with the decision (and having the realtor say it's best for this market was a huge relief).

      So they aren't worn-out, just not painted. Although our furniture is peppered with mid-century finds, the major pieces and also the completely redone main bath and master ensuite aren't mid-century, but more traditional, so the kitchen cabinetry works well in my opinion. Plus, with new counters and backsplash, the whole kitchen looks fresh.

      But, if the next owner wanted to go to town and paint the cabinets, they can. I guess, when we go to sell in a few years, I'll know for sure if potential buyers dig the unpainted look ;)

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  8. I had no idea this type of service was available. I'm still a renter but trying to soak up as much home-ownership knowledge as possible. Love you blog and thanks for the tip!

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    1. Thanks!

      Happy to be helpful. I spent years researching the buying and selling of homes while renting. It's a huge purchase, I didn't take it lightly, either.

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  9. good things to know indeed! We are renting for the next couple of years...in hopes this market does better and we can actually make a profit. Fancy that. Let's all cross our fingers!

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  10. It is a smart idea to have your house evaluated to know the possible market cost. In two years time, I think the value of your house will increase more. You just have to maintain its beauty and follow the advice of the realtor. It could give you a big return of investment in the future. #Calvin Mordarski

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