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What Goes In To A Market Evaluation?

Blog by Wes Morrow | October 14th, 2016

Have you ever wondered what goes in to a market evaluation on a residential property? I’m guessing probably not, but I’m here to break it down for you! Haha! For a proper evaluation, you need to compare apples to apples. The problem is that most homes are oranges to apples or pears to apples. First step is evaluating the subject property. Ideally, I like to visit the home. This way I can get a good feel for how the property was cared for. Is there any work that needs to be done? Anything a potential buyer would see as a fault? Anything positive features? Some features I look for and will do adjustments for: location (on busy road or by a major route or a cul-de-sac) year built location of lot (backs on to greenspace, back lane) size of lot square footage number of bathrooms type & developement of basement (walkout, full, finished or not) garage – attached or detached number of bedrooms upgrades (kitchen, granite, bathrooms) flooring (hardwood & tile or stone) fireplace Ideally, you will want to stay in the same community, however, if there isn’t enough sales data, you may have to expand the search. Also, you want to compare homes that are approximately the same age. I try not to go more than 3 years +/- from the subject property. From here, I will narrow down the 4 closest comparables for active properties, any properties that didn’t sell (expired or terminated) and 4 for recent solds. I only go back 90 days for solds & not solds unless there isn’t enough sales data. These listings will get marked up – green highlight means the feature is superior on the subject property, red highlight means the feature is inferior on the subject property. Each adjustment will get a dollar value. Those adjustments are added or subtracted to the listed price or sold price to give an apples to apples comparison. The sold properties give you an idea of what buyers are willing to pay for your property (true market value) where the active listings give you an idea of where to position your property in the market place. Sometimes, depending on how much competition is out there, you may be able to price your property a little higher or lower. Additionally, I will compile sales data over the last 30/60/90 days to see if there is a trend in the area. Average days on market and average sale price to list price ratios help to narrow down a list price. The list price is given in a range depending on how quickly a client wants their place sold and what the current market conditions are. If you know anyone that is looking to sell their home, please pass along their contact information. I promise to treat them well and get their home sold quickly and for the most money!

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Thinking of buying or selling? Now more than ever, you need the help of a professional to make sure you understand your specific market correctly. Get in touch with me today!