How to Determine the Market Value of a Home in Edmonton
There are several reasons you might want to determine the market value of a home. Perhaps you're planning to sell your home, and you're wondering what to list it for. Or maybe you're looking into buying a home, and you want to ensure the property is priced fairly. Or maybe, you're simply curious.
You could even be a combination of all of these things. But either way, there are several steps to take to help you determine the market value of a home, and we're going to tell you about them in today's post. We'll also cover important points like the difference between the market price and the market value of a home, so don't miss the rest of this post!
What is the Market Value of a Home?
Let's begin with a helpful definition of market value. Here's the one Canada Revenue Agency offers:
"The highest price, expressed in terms of money, that a property would bring, in an open and unrestricted market, between a willing buyer and a willing seller who are both knowledgeable, informed, and prudent, and who are acting independently of each other."
When it comes to a home specifically, you can also think of the market value as the price a particular home (in its current condition) would sell for within 30-90 days.
The differences between market value and market price
Because this relates to the price of a home, it's understandable that market price and market value are often confused with one another. But the truth is, there are differences between these terms.
As this Inman article explains:
"The major difference between market value and the market price is that the market value, in the eyes of the seller, might be much more than what a buyer will pay for the property or its true market price. Value can create demand, which can influence the price. But, without the demand function, value alone cannot influence the price. As supply increases and demand decreases, the price goes down, and value is not influential. As supply decreases and demand increases, the price will rise, and value will influence the price. Market value and market price can be equal in a balanced market."
With all of this in mind, let's talk about how to determine the market value of a home in Edmonton—whether you're buying or selling a home or simply curious.
(Are you planning to make some changes to your home in hopes of boosting its resale value? Here are some that might not be worth the investment.)
Determining Market Value of a Home in Edmonton
Take advantage of online tools
There are several helpful tools to help you figure out the fair market value of a home. Zillow is now available in Canada, for example. This Alberta Value Calculator also lets you punch in a home's specs, including the number of bedrooms and bathrooms, for a free home valuation.
(Pricing a home right based on market value is important if you want to sell a property fast. But there are also other steps to take, and we cover them in this post)
Run a CMA (comparative market analysis)
Another option is conducting what's known as comparative market analysis or CMA:
"If you are a Seller, the real estate agent might bring a CMA or Comparative Market Analysis to show you what houses in the market are listed for or selling for, when you are listing your home. If you are a home Buyer, a real estate agent might also use a CMA to show you the worth of a home based on the market. The CMA is a helpful tool to both Buyer and Seller because the market is what dictates what a home is worth."
(Take a look at this post next to learn more about using Comparative Market Analysis when buying or selling a home)
Check recently sold properties nearby
It's also helpful to check what other similar properties nearby have recently sold for. Just be sure the properties you're looking at are similar in size, square footage, condition, features, bedrooms and bathrooms, and age to ensure you're getting an accurate depiction of what another property nearby might be.
We Can Help
Whether you're preparing to buy or sell a home or you simply want an idea of the market value of a home in Edmonton, let us help you ensure you're getting accurate information. We offer several different tools on our website, and we are also available by phone or email to answer any questions you might have.
Get in touch with the Best Edmonton Real Estate Team today!