Let’s talk about Value. Value is synonymous with worth, desirability and utility. In residential Real Estate, a home can have three types of value:
Objective Value – This is based on the cost of creation by a competent and impartial appraiser or investor who has no personal interest. This is how buyers view listings when searching for properties, and in the early stages of the search process, holds the most weight.
Subjective Value – This is based on an individual’s estimate of future benefit. Because it ignores a property’s cost of creation or the value indicated by the market place, you can think of subjective value as personal value.
Market Value – This is a blend between objective and subjective value and has the most relevant bearing in the residential real estate market. It is defined as: a valuation resulting from the informed, intelligent and voluntary actions of both the buyer and seller, where neither of them is acting from necessity. In other words this is the most probable price which a property should bring in a competitive and open market.
Most Realtors and therefore, most homeowners looking to sell, use a CMA or Comparative Market Analysis to determine their home’s value. A CMA uses statistics for similar properties in the same area that have been recently sold, or are active, pending or expired. It’s basically a snapshot in time of comparable properties to assist sellers in evaluating their home next to other offerings in the marketplace in order to establish a fair market value when listing a property.
While the CMA is a highly useful tool to start out with, it does have its limitations. It can’t tell you why some homes sell above or below their market value, in other words, it often doesn’t take into account, or isn’t able to quantify elements of subjective value.
Ron’s decades of experience studying markets will give you a member on your team who can put the final picture together, including both the story that the CMA tells us and the factors it leaves out. His ability to view your home objectively, both from your perspective as the seller and the perspective of potential buyers, will give your home the edge required in Calgary’s competitive market.
Ron’s knowledge and constant study of local, national, and international markets provides him with the tools to objectively study the information potential buyers are presented with. This combined with his faculty for communication means that you will receive honest and informed answers to any questions you may have, backed by detailed statistics, allowing you to come to educated conclusions and take the guesswork out of listing your home.
Ron uses the CMA as part of his pricing strategy, but because of it’s limitations, it is not the only tool in his arsenal. Statistical analysis, the CMA, visual representation of data, as well as a fair amount of research to determine favorable conditions based on the market are all things Ron adds to the tool kit when coming up with the best way to sell your home for the most profit, in the shortest amount of time.