How to determine the asking price for your property

Selling your cottage or home is a big step. In the words of real estate sales representative Terry Carr of Re/Max in Haliburton, it can be “an emotional roller coaster of trepidation, fear of the unknown, sadness and excitement!”
Here’s some advice from local real estate experts to stay detached and price strategically.

“Property is worth whatever an informed buyer will pay for it,” says Russ MacKinnon, a broker at Royal LePage in Bracebridge and a designated appraiser.
But it’s not always worth what you think it is.
“Individuals sometimes get confused with what they need in terms of money, and what their house is worth,” explains Robert Philp, a real estate sales representative at Royal LePage in Bracebridge. “We get that all the time: ‘We need a bigger house, it costs this much, so we have to get this much for our house.’”

Terry Carr Re/Max Haliburton		Shelly Schedewitz Sutton Group
Robert Philp Royal LePage		Mary Jane Philp Royal LePage

Increasingly, however, homeowners are taking initiative in the appraisal process.
“Buyers have so much information nowadays, that they come to their own conclusions, and they direct the market,” says Shelly Schedewitz, a real estate sales representative with Sutton Group in Huntsville.
But throughout the process of placing a value on your home or cottage, you should never lose sight of the objective – selling the property.
“Your mission,” says Mary Jane Philp, a real estate sales representative at Royal LePage in Gravenhurst, “is to have as many qualified buyers come to see it as possible. Don’t put them off.”

Though most real estate agents consider it inadvisable, you can get an idea of what your home is worth by doing some investigative work.
“Sale prices are usually, by word-of-mouth, easy to learn,” says Carr, “by watching the market, looking at listings in the newspaper, looking on www.MLS.ca (Multiple Listing Service database), asking neighbours what they have heard about recent sales.”

Online services can also aid in the process.
“Most of these services collect your information and then forward the data on to realtors in their network to establish the value of your home,” says Wendy Webb, a real estate sales representative with Royal LePage in Bracebridge.
If you’re willing to spend the time and the money, and understand legal descriptions of property, Webb adds, you can research sale prices at the land registry office, though she cautions that it can be months between the time a sign says sold and when the registry office has the price.

“You are somewhat limited in the knowledge you can gain on your own,” cautions Webb. “For example, you may not know what the upgrades, quality of finishing and the condition of the interior of the homes may be.”
The advantage of having a real estate agent do your evaluation is their market expertise and information. The Multiple Listing Service database they have access to has sales data for properties that the public can’t access online.
On request, a real estate agent will do a comparative market analysis. The agent studies comparable properties in the same location that are currently listed, were sold recently, and have expired listings.
“Currently listed property represents your competition on the market. You always want to stay competitive to draw the buyers in,” Schedewitz explains. “Recently sold properties are most important as they show true value and represent what buyers are willing to pay for similar properties. Expired listings help to determine what prices are too high for the market to bear.”
Most realtors will do a comparative market analysis at no charge, so it can pay to have more than one done.

But what if they come back with varying prices?
“There’s always going to be the low person, and there’s going to be the extremely high person,” says Schedewitz, “because they want the listing. My suggestion is to go with the person who is going to work the hardest and advertise the most for that property. What are you paying the commission for?”
Ellen Wiley, broker of record at Coldwell Banker Wiley in Dorset, offers her advice:
“Anyone who simply walks through your property and then says it is worth ‘X dollars,’ your immediate reaction should be, ‘Based on what?’ If you are faced with very different values, consider the facts which have been shown to you, re-question them if necessary and then be sure you have been shown how your property fits in the market with its present competition.”
Your home, or cottage, has been part of your life for years, if not decades. It’s full of memories. Maybe it’s also full of renovations, done with your hard-earned dollars or even your own hands.

Beverly Wood, a real estate sales representative with Coldwell Banker Thompson in Huntsville, recommends taking an objective walk through your home.
“Try to use the ‘eyes’ of prospective buyers, and see what they see. For yourself and your family, the home has given you many years of family times, fun and many memories. For the buyer, they are looking at the structure, layout, desirability of the home and how it compares to all the other homes on the market,” says Wood.
And money spent on renovations doesn’t always increase the market value of the home.

Wendy Webb Royal LePage		Ellen Wiley Coldwell Banker
Beverly Wood Coldwell Banker		Russ MacKinnon Royal LePage

Webb explains, “For example, $25,000 spent on landscaping may increase the curb appeal of your home and the potential for sale, but will not always translate to the equivalent in market value.”
Robert Philp estimates it’s possible to get back up to 80 per cent of the value invested into kitchen or bathroom upgrades. Swimming pools and skylights, on the other hand, can have no or even a negative effect, both having a reputation for headaches.

Naturally, the size of your property also dictates its market value.
“Acreage is a great drawing card,” says Carr, “but does not increase the value of your home on an incremental basis. For instance, a two to three-acre lot close to town is a real find, in comparison to half-acre lots in the area. But the difference in price between a 30-acre lot or a 50-acre lot is much less.”
The crucial importance of location still holds true. Being next to a marina or busy street, for instance, has an affect on value.
As a rule of thumb, Wiley says the bigger the lake and the better the access, the more a cottage is worth. But Robert Philp feels there is a shift happening, from the big lakes to smaller ones.

He says, “People are thinking, ‘I live and work in a busy, hectic environment in the city. When I go to the cottage, I don’t want to see Sea-Doos and skiers passing all day long . . . I want a more tranquil setting.’”
Something the realtors caution against in the selling process is overpricing your home or cottage.

“When the list price finally comes down, the feeling is that there must be something wrong with the place,” notes MacKinnon.
“We refer to this situation as stigmatization. It is a hard reputation for a house to overcome.”

Wood explains, “Let’s say they price it at $350,000, knowing they should be at $299,000. Then they drop and drop to $299, finally, and then get an offer of, let’s say, $280,000. They take it because, by that time, they are frustrated. If they had priced it at $299,000, they would probably have received $295,000 right off.”
So, the bottom line is be realistic, be objective and make full use of the available comparative market information. Remember that buyers are savvy. Set a price that’s attractive to them. With these tips in mind, you’ll walk away with the most satisfying deal for your property.GETTING READY TO SELL
“Pricing is certainly remaining strong,” states Webb. “The Re/Max corporate forecast indicates 2007 as being a very strong year with no weakening.
When pricing a property, several factors are involved.
“The most important is property that has sold. This indicates what the market will bear,” explains Webb.
“Cottages and properties are so unique and so individual. It’s not like going into a subdivision where the houses are similar and the area and neighbourhood are the same.
“Cottage country is quite different,” she continues. “We look at the view, the topography, the condition of the building, the age of the septic, is it winterized or not winterized, accessibility, seasonal roads, private roads. Is there a well, a water purification system, town sewers?
There is a whole gambit that you run through to help establish a price,” states Webb.
“We check with the township for the rules governing future construction on the property and for a steep property we get prices on an inclinator.
“We offer suggestions, such as the property needs painting or the dock needs to be repaired, and sometimes we bring in a professional stager.”

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