On occasion, sellers are stuck on certain factors that they believe influence how much they will be able to sell their home for. Here are 6 things that do not affect the value of your home:
1 – How much money you need to purchase your next home.
Buyers look and compare one home to another. In most cases, a home buyer will not pay more for a home than it would cost them to find a similar home, in similar condition with similar amenities in the same neighbourhood.
This is sometimes a difficult thing to understand, especially if you’re selling because of financial need. The market value has nothing to do with what you may need from the sale of your home. The market only cares about how the home compares to other homes that recently sold.
2 – How much you paid for your home.
Just like the stock market, how much you bought it for has no bearing a stock’s current value. Similarly, the price paid for a home one year ago, three years ago or ten years ago has nothing to do with what that home is worth today. You can expect an appreciation in home values in Ottawa, but that appreciation is not always in a straight line. Real estate values exist at a fixed point in time. A home may have been purchased for $500,000 three years ago, and may be worth $800,000 today. Someone else may have bought a substantially similar home on the same street for $450,000 five years ago and it is also worth $800,000 today.
3- How much you spent on improvements
This ties in with #2 (how much you paid for you home). Unless you’re flipping properties in a short amount of time and in the same market, the amount gained on the value of your home is very hard to quantify. Will a home sell for more if it has been updated? It depends on the updates, the quality of finishes, if the updates are something buyers want, etc. If your kitchen was renovated 20 years ago, it may not resonate with buyers today, especially if your next door neighbour renovated recently.
4 – The value of a similar home in a different community
A large city like Ottawa will have many distinct neighbourhoods and dozens of micro-markets. The same house (age, size, model) in Kanata might command a different price than it would in Orleans.
5 – Your personal attachment to your home
You have great memories of events that happened in your home and while you can use them to create a good narrative to sell your home, your memories will not affect the over all market value of the home. A Realtor can make an unbiased and unemotional assessment of your home.
6 – The beautiful tree that flowers for two seconds once a year
The tree in the font yard that blooms spectacularly for one week a year. If you’re holding out on putting your home on the market until the gorgeous apple tree in the front yard blooms, DON’T. Yes, it’s very pretty. But it invokes an emotion in you, not prospective buyers.
The price of your home is a moving target. It’s based on recent neighbourhood sales, buyer demand, the condition of your home, interest rates and more.
Want to know how you can update your home for a successful sale? Give me a shout.
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