One of the most important things that a real estate sales representative does and does well, is understand the values of properties. As a sales representative, I have access to current, recent and past sales on any street in any neighbourhood in and around the GTA. The MLS system and the Land Registry are invaluable for determining present, past and even future values for almost any property.
As an example, suppose you ask me about 123 Any Street in the GTA and ask if it is priced fairly. The first thing I do is check to see the status of the present listing if listed on MLS (or not). Then I check to see whether or not it has been listed previously and whether it sold or not. After that, I will check the rest of the street and the neighbouring streets for comparables that will give me more information about what home values currently are in the area and the trends in the past year or so, as well as where home values are heading in the short term.
There are many factors that can affect the price of a property: Quality of finish and updates compared to neighbouring properties; location on the street; if the house has been staged…there are hundreds of ways of telling you that the list price is a fair price, but there are also hundreds of ways of telling you that it is not. Confused?
Remember that if a property is $200,000 or even just $25,000 more than other properties on the street and in the neighbourhood, from my position as real estate practitioner, the Seller better have a good reason why there is a difference.
The question I have to ask you as a Buyer is: what do you want to do about the discrepancy in pricing?
One example that I can give you would be a recent property that was purchased at the then market value in a neighbourhood at a price of $450,000. The property was completely renovated and updated. Showed very well. Now three months later, after the closing, the new owner puts the property up for sale at $650,000. Remember that the new owner has done nothing to improve the house. So is the seller trying to turn a quick profit of $200,000?
Guess what? The home values in the neighbourhood haven’t gone up that much, but you are interested in the property and really want to move into the neighbourhood. Big dilemma here! Start at a price that reflects the values in the neighbourhood and go as high as you want from there.
What is a fair price? The classic answer to that question is: whatever a Buyer is willing to pay for a property of this type and in this neighbourhood and at this time.
The fact that I have told you that the property is overpriced doesn’t mean you shouldn’t buy it; remember that the final decision is yours.
