How much is my Comox Valley home worth? This is one of the often most asked questions that I receive as a real estate agent in the Comox Valley. Before discussing this issue, let’s first look at the difference between cost, value, and price.
The cost of a home is what you paid for it. The value of your home at a specific point in time can be described in a number of different ways, and I will discuss several of them in this blog. The price of a Comox Valley home is generally what a seller is asking for the home when they place the home on the real estate market to sell. Comox real estate listings are not all priced properly. Let’s briefly discuss the following three types of valuation of a home: appraised value; value to owner; and market value.
Appraisals of homes are often undertaken by certified appraisers for a variety of reasons that include such things as : valuation for tax purposes; valuation for mortgage lending purposes; and valuation for sale upon foreclosure. When valuations are done for tax purposes, the appraiser is guided by provisions in the relevant Acts. When valuations are done for mortgage lending purposes, lending value is generally defined as a long-term conservative estimate of market value. When a valuation is done on a foreclosed property, the appraised value will have been undertaken at a specific point in time. Based on this brief discussion of home appraisals, it is easy to understand why the various types of appraisal mentioned could result in different dollar values estimates pertaining to the same home.
Value to owner is more difficult to quantify because of the many elements that may go into what a specific owner deems valuable in the home. The owner may have paid a certain amount of money to build or buy the home, and subsequently may have invested additional money in the home through various renovations. The owner may have some sentimental or emotional attachment to a feature or features in the home that they believe makes the home more valuable. Each of these factors may have a bearing on what the owner believes is the value of their home.
For the purchase and sale of real estate, only the market value of a home is most relevant. The market value of a home is determined by the real estate market (not by the person doing the market assessment). Market value is based on recent sales prices of similar homes in the same neighborhood. What constitutes recent, similar and same can vary according to the specific location and real estate market within which the home is situated. It is often said that all politics is local. With real estate, market value is often very local.
So what is my Comox Valley home worth? It is worth what home buyers are willing to pay for it on the real estate market. It is important to realize that just because a home is listed on a specific real estate market by a real estate agent, it does not mean that the home is listed at market value. Sometimes Comox Valley waterfront homes will be listed above, at, or even below market value. Why they choose to do this is often as varied a reason as the people are individuals. For example, an investor who is in no hurry to sell a home may choose to “test’ the market and list above the market to see how much they can get for the home. Someone who has to sell in a hurry may list below the market value. Whatever the reason, it is always wise for a buyer to know the market value of a home before they decide to make an offer on a home. Similarly, it is wise for a seller to know the market value of their home before they decide to list their home.
While the determination of a home’s market value may seem straight forward, this is not always the case. Ask three Comox Valley real estate agents what the market value of your home is and it is possible that you may get three different figures. Ask your real estate agent to explain in some detail how they came up with the market value. Sellers may wish to ask more than one agent for an assessment of market value and how they determined the market value in order to assess the rigor that the agent applied in the determination. I am more than happy to explain the process that I use. Should you wish to discuss the market value of your home in the Comox Valley, contact Brett Cairns of RE/MAX Ocean Pacific Realty.