What Is Your Toronto Home Worth? What A CMA Report Means And Understanding Your Local Real Estate Ma
What Is Your Toronto Home Worth? What A CMA Report Means And Understanding Your Local Real Estate Market.
When sellers want to know how much their home is worth, they can reach out to an experienced real estate agent to obtain a CMA [Comparative Market Analysis]. A CMA report will reflect an estimate of value based on the local statistics of the recent SOLDS, EXPIREDS, and LISTINGS, and how long they were on the market for. True comparable only goes as far back as 6 months. If there are no comparables of similar homes sold in the 6 months time frame, we will carry out an analysis by looking at time trend. In an upward or downward trending market, adjustments will need to be made when suggesting a price to sell.
Market Value is a function of negotiation based on recent solds. It reflects a range and can be affected by factors such as seller or buyer motivation, closing date, competition or lack thereof.
A CMA is not an appraisal. The content is used solely for listing and no other purpose.
An EXPIRED property sets the upper limit value of similar properties in the area.
CURRENT listings on the market are the true competition.
SOLDS are historic. No one can buy a sold house.
If you are thinking of selling your home, it is important to get your listing priced accurately to support what the market is willing to pay.
Some homes are unique such as architect designed homes, restored heritage properties, custom houses etc. Sellers of unique homes have to understand that COST does not equal VALUE or what a buyer is willing to pay.
Some physical and organic factors that could affect value:
A house on a main street may have higher commercial value than a property on the side street.
A Farm at the urban edge of town or near transit to the city centre may have development potential.
The present use is not always the highest and best use. It will depend on zoning and permitted use.
New vs Resale
Condo versus Freehold
Improvements [Over improvement of the property does not fetch a Seller more! ]
Housing type [a wide semi-detached may be worth the same as detached with a small lot on the same street]
Exclusive features attached to the unit [ie. balconies in condos]
Floor levels, views, exposure, square footage
Seller and Buyer motivations
When Real Estate Agents carry out a CMA to determine the estimate of value for your home, the number is usually presented within a bracket to narrow down the listing price [between Ceiling of Value and Floor of Value]. Adjustments are made based on the most basic elements of the home. The Selling Price of the home is ultimately what a homebuyer is willing to pay balanced with how much a seller is willing to accept as a trade.
Then the fun part! Interpreting the CMA:
Typically, the longer the exposure on the market, the steeper the price adjustment. I will include 3 categories of numbers in the CMA report:
Rejected listings within a bracketed price range. This bracket will confirmt that based on the current market, it's unlikely your house will not sell in this range.
Historic and Sold listings within a bracketed price range, and also the % of price increase or decrease in the past 6 months with an upward or downward adjustment.
Current competing listings within a bracketed price range. The highest end of the current competing listings could expire if there is no buying interest.
CMA is not an exact science. If you are thinking of selling your home, I can help you assess how much your Toronto home is worth and get it sold. Contact me for a consultation.
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