When someone contacts us about possibly listing their home, “how much can I earn?” is the first question we get, 99% of the time. The concern is valid. You’re depending on results so you can move on to whatever comes next, whether it’s buying a new house or travelling the world.
Enter the home evaluation— also known as a CMA or “Comparative Market Analysis.” What does this mean and how does it help you get the maximum value when selling your property? Today, we’ll take a deep dive into how we arrive at an accurate and compelling listing price.
Detailed valuation is the foundation of a successful sale in today’s fast-moving market. Find out how much your house is worth by scheduling a complimentary home evaluation.
Compiling the Data
A home evaluation (or CMA) is a report prepared by a real estate agent providing data comparing your property to similar properties in the marketplace.
The process starts by gathering intel on your property. It involves measuring the square footage and analyzing the layout. Your agent will likely ask about any renovations you’ve done or any extra value your house provides, like if you’ve installed main-level laundry facilities or added a second bathroom.
Your Home Versus Other Homes
Figuring out a price point that will generate maximum exposure is about more than what features your house offers. We also have to take a look at the competition. The market, more than anything else, determines how much your property will realistically earn. Once again, research is essential.
The next step is for the agent to obtain data on comparable properties in your area. This data is available through the MLS® (Multiple Listing Service) System.
A qualified agent has other tools at their disposal though, such as information from various real estate boards and other publications. Being part of the MLS® is an advantage, but we use multiple sources to pull and interpret the data.
Not to Be Confused With an Assessment or Appraisal
The terms “home evaluation”, “ assessment,” and “appraisal” tend to be tossed around as though they were interchangeable. While they all relate to the value of your home, they serve varying purposes and can lead to completely different numbers. They also happen at different times.
A real estate agent performs a home evaluation. It occurs before your home is listed for sale to help you determine the right price.
Appraisals
Appraisals are typically performed for the purpose of financing after you have accepted an offer but before the closing date. The purpose is to protect the lender’s investment by ensuring they are not covering more than the property is worth.
Unlike a home evaluation, a real estate agent can not provide an appraisal. You’ll need a licensed appraiser, and there may be a small fee. Both the buyer and seller should be aware that the appraisal can be lower than the final purchase price and even the pre-approval amount. It’s based on fair value for the market and does not account for bidding wars, a critical point when considering an offer.
Assessments
Assessments are for tax purposes only. Unlike with the home evaluation or appraisal, the lower the amount, the better – it means a lower property tax bill.
The Municipal Property Assessment Corporation (MPAC) is responsible for evaluating homes and determining their value based on age, location, lot size, and other factors. Ontario properties are supposed to receive a valuation every four years, but that does not always happen.
Do you want to set yourself up for the best possible results when selling your house? Start by reading the posts below:
- How Perfect Does a House Have to Be Before Selling?
- Why Should You Sell Your Home This Summer?
- Preparing To Sell Your Home
The Key to Enhancing Results
A home evaluation is a starting point when considering a move. Once you have a number, you can decide whether or not it’s worth making improvements to enhance your property value.
This is where the advice of a Realtor® is critical. Not everything will resonate with potential buyers. Even if they love the result, they may not want to pay extra.
The decision of renovations is even more nuanced than you realize due to the different demographics that might be drawn to your home. For example, one buyer might be enthralled with the beautiful in-ground swimming pool in the backyard. Others will be getting estimates for how much it will cost to fill it in.
In either case, investing $100,000 in a luxury pool is not likely to pay off in terms of the price. If you decide to proceed, be sure it’s for your own enjoyment, not to prepare your house for sale.
Other minor improvements will have a dramatic impact on your selling price. Every situation is different, but your real estate agent is happy to guide you!
Do you have questions about living in Barrie or buying or selling a home here? Get in touch with The Peggy Hill Team today at (705)-739-4455 or email info@peggyhill.com.
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