The asking prices of most homes on the market indicate the current state of the market, and usually, mirror the prices for which other similar homes in the area have recently sold. In deciding upon a selling price, a home-seller must establish a balance between the desire to draw the highest offer and finding a price that will be reasonable enough to attract an appropriate pool of prospects, and competitive offers. While most selling agents counsel their clients to consider this equation when pricing their home, keep in mind that some homes are not properly priced.


It’s important to educate yourself about the current market before approaching the purchase of a home. The market will always influence a property’s value, regardless of the state of a home, or its desirability. Here are the types of market conditions and how they may affect you:


1. Seller’s Market:

A seller’s market is considered a “hot” market. This type of market is created when demand is greater than supply—that is, when the number of buyers exceeds the number of homes on the market. As a result, these homes usually sell very quickly, and there are often multiple offers. As a buyer, you need to consider that many homes will sell above the asking price; in other words, you may have less room to negotiate, and may encounter competing offers. Though most buyers want to get a home for the lowest price possible, reducing your offer could mean opening the door for another buyer instead.

2. Buyer’s Market:

A buyer’s market is a slower market. This type of market occurs when supply is greater than demand, the number of homes exceeding the number of buyers. Properties are more likely to stay on the market for a longer period of time. Fewer offers will come in, and with less frequency. Prices may even decline during this period. As a buyer, you will have more selection and flexibility in terms of negotiating toward a lower price. Even if your initial offered price is too low, the seller will be more likely to come back with a counter-offer, so you can begin the process of negotiation.

3. Balanced Market:

In a balanced market, supply equals demand, the number of homes on the market roughly equal to the number of buyers. When a market is balanced there aren’t any concrete rules guiding whether you should make an offer at the higher end of your range, or the lower end. Prices will be stable, and homes will sell within a reasonable period of time. You will have a decent number of homes to choose from, and may encounter some competition for offers on the home of your choice, or none at all.

Before you make an offer to purchase a home, establish whether the current market is a Buyer’s, Seller’s, or Balanced market. Also, evaluate the price similar properties have sold for in the area, and the length of time these properties spent on the market. Determine how the home you’re considering compares to these other sales. Is this one over-priced, under-priced, or a fair price? By establishing this information prior to making an offer, you will be in a position to negotiate the best price for the home and be prepared for any additional opportunities that may come your way.


Keep in mind, a realtor is trained to provide clients with this information about the market, helping you make the most informed decision possible. The right realtor will guide you through the ups and downs of the market and keep you up-to-date with the types of changes you might expect. These realtor resources and connections will prove to be invaluable as you navigate the real estate market.

The other main factors that affect market value are:


1. Location:

The proximity of the home to amenities, such as schools, parks, public transportation, and stores will affect its status on the market. Also, the quality of neighbourhood planning, and future plans for development and zoning will influence a home’s current market value, as well as the ways in which it might change.

2. Property:

The age, size, layout, style, and quality of construction of the building will all affect a property’s market value, as well as the size, shape, seclusion and landscaping of the yard.

3. The condition of the Home:

This includes the general condition of the home’s main systems, such as the furnace, central air, electrical system, etc., as well as the appearance and condition of the fixtures, the floor plan of the house, and its first appearances.

4. Comparable Properties:

Examine the selling and asking prices of similar homes in the neighbourhood. Ask your Realtor to prepare you a general market analysis of the neighbourhood you’re interested in, so you can determine a range of value for a particular property. A market analysis will provide you with a market overview and give you a glimpse at what other similar properties have been selling for in that area.

5. Market Conditions/ Economy:

The market value of a home is additionally affected by the number of homes currently on the market, the number of people looking to buy property, current mortgage rates, and the condition of the national and local economy.

Speak to Kristy Dusdal about acreage for sale in Abbotsford.  Kristy is one of the experienced Abbotsford realtors.  View Abbotsford real estate listings now to find your dream property.

 

Speak to Kristy Dusdal about acreage for sale in Abbotsford.  Kristy is one of the experienced Abbotsford realtors.  View Abbotsford real estate listings now to find your dream property.

 

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There is no set equation to determine how you’ll reach an offer price. Rather, the process involves a range of research and comparison that will vary with each situation. You’ll need to look at sales of comparable properties, and factor in additional data such as the condition of the property, the current market, and seller circumstances. With this information in hand, you will be able to determine a fair price range and, from there, establish the price you’re willing to offer.

 

Concentrate on the following areas to help you determine an offer price:

Comparable Sales

  • Compare prices of homes that are similar to the property you’re considering in the following areas: number of bedrooms and bathrooms, square footage, lot size, type of construction, and garage space.
  • The most comprehensive and in-depth information can be accessed through the Multiple Listing Service (MLS). Your Realtor, who will be working closely with you to set your offer price, can help you navigate this service.

Property Condition

  • Observe how the property compares to the rest of the neighbourhood. Is it average, above average, or below average?
  • Look at structural condition: walls, ceilings, windows, floors, doors.
  • Pay close attention to: bathrooms, bedrooms, condition of plumbing and
  • electricity.
  • Also check the fixtures: light switches, doorknobs, drawer handles, etc.
  • What is the condition of the front and back yards?

Home Improvements

  • Cosmetic changes can be largely ignored, but any major improvements should be taken into account.
  • Take special note of: room additions (especially bedrooms and bathrooms).
  • Items such as swimming pools may be taken into account, but usually won’t affect your offer. Your Realtor can offer your guidance in these matters.

Market Conditions

Seller’ s Market:

A seller’s market is considered a “hot” market. This type of market is created when demand is greater than supply—that is, when the number of Buyers exceeds the number of homes on the market. As a result, these homes usually sell very quickly, and there are often multiple offers. Many homes will sell above the asking price.

Buyer’s Market:

A Buyer’s market is a slower market. This type of market occurs when supply is greater than demand, the number of homes exceeding the number of Buyers. Properties are more likely to stay on the market for a longer period of time. Fewer offers will come in, and with less frequency. Prices may even decline during this period. Buyers will have more selection and flexibility in terms of negotiating toward a lower price. Even if your initial offered price is too low, Sellers will be more likely to come back with a counter-offer.

Balanced Market:

In a balanced market, supply equals demand, the number of homes on the market roughly equal to the number of Buyers. When a market is balanced there aren’t any concrete rules guiding whether a Buyer should make an offer at the higher end of his/her range, or the lower end. Prices will be stable, and homes will sell within a reasonable period of time. Buyers will have a decent number of homes to choose from, so Sellers may encounter some competition for offers on their home, or none at all.

 

Comparable sales information helps you establish a price range for the home you’re interested in. Adding in the additional factors mentioned above will guide your decision of whether you consider a “fair” price to be near the upper or lower limit—or the middle—of that range. Keep in mind, this price should be the one you’d be happy with once all negotiations are said and done. The price you decide to begin with depends on your particular style of negotiation. Most Buyers begin the negotiation process with a number lower than the “fair” price they’ve come up with.

 

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Each homebuyer has different ideas of what will constitute the ideal home for them, these notions often based on particular aesthetic preferences. But one thing that unites all potential homebuyers is the desire to find a home that is fundamentally sound—in areas beyond the immediate sweep of the eye—and that will provide a safe, comfortable, and efficient foundation for their life behind a new door.

 

This is where the services of a home inspector come in. During a home inspection, at least 30 areas of the home are placed under the home inspector’s “microscope.” We’ve compiled the ten most common weaknesses uncovered in a typical home inspection. If not addressed, these problems could cost you thousands of dollars in the long-run. So, knowing what to look for, and performing your own thorough pre-inspection, will help you to identify areas for repair or improvement before they grow into costly problems.

1. Damp Basement:

If a mildew odour is present, the inspector will be able to detect it, as this smell is impossible to mask or eliminate. Mildew odour is often the first indication of dampness in the basement. The inspector will also examine the walls, checking for any signs of whitish mineral deposit just above the floor, and will note whether you feel confident enough to store items on the floor.

 

Repairs can run anywhere from $200 to $15, 000, this cost ultimately influencing the calculation of your home’s value, so consider enlisting the help of an expert to ensure you have a firm grasp on the bottom line before moving forward with the sale of your home.

2. Poorly Installed/ Defective Plumbing:

In older homes, plumbing problems and defects are very common. The inspector will determine whether your home’s plumbing is subject to leaking or clogging. Signs of leakage can be visibly detected. The inspector will test water pressure by turning on all the faucets in the highest bathroom and then flushing the toilet. If the sound of water is audible, this indicates that the home’s pipes may be too narrow. The inspector will also check for signs of discolouration in the water when a faucet is first turned on. The appearance of dirty water is usually an indication that the pipes are rusted—a water quality problem that should be dealt with immediately.


3. Older/ Poorly-Functioning Heating and Cooling Systems:

Heating/ cooling systems that are older or haven’t been properly maintained can pose serious safety and health problems. An inspector will determine the age of your furnace and, if it is over the average life span of a furnace (15-20 years), will likely suggest you replace it, even if it is still in good condition.


If your heating system is a forced air gas system, the heat exchanger will be examined very closely, as any cracks can result in the leak of poisonous carbon monoxide gas. These heat exchangers are irreparable; if damaged, they must be replaced. While replacing these components may seem expensive, a new system will yield heightened efficiency, reducing monthly heating/ cooling costs substantially, and benefiting your long-term investment.


4. Older/ Unsafe Electrical System:


In older homes, it is common to find undersized services, aluminum wiring, knob-and-tub wiring, or insufficient/ badly-renovated distribution systems. When an electrical circuit is over-fused, more amperage is drawn on the circuit than what the circuit was intended to bear, creating a fire hazard. You’ll typically find a 15 amp circuit in a home, with increased service for larger appliances such as dryers or stoves. If replacing your fuse panel with a circuit panel, expect a cost of several hundred dollars.


5. Older/ Leaking Roof:

An asphalt roof will last an average of 15 to 20 years. Leaks through the roof could be a sign of physical deterioration of the asphalt shingles caused by aging, or could indicate mechanical damage caused by any number of factors, such as a heavy storm. If you decide your roof requires new shingles, you’ll first need to know how many layers are beneath, in order to determine whether the roof must be completely stripped before installing the new shingles.


6. Minor Structural Problems:

Common in older homes, these problems range from cracked plaster to small shifts in the foundation. While this variety of problem isn’t large enough to cause any real catastrophe, they should be taken care of before they grow.


7. Poor Ventilation:

Unvented bathrooms and cooking areas can become breeding areas for mold and fungus, which, in turn, lead to air quality issues throughout the house, triggering allergic reactions. Mold may additionally cause damage to plaster and window frames. These problems should be identified and taken care of before any permanent damage is caused.


8. Air Leakage:

A cold, drafty home can be the result of any number of problems, such as ill- fitting doors, aged caulking, low-quality weather strips, or poor attic seals. This nature of repair can usually be taken care of easily and inexpensively.


9. Security Features:

An inspector will look at the standard security features that protect your home, such as the types of lock on the doors/ windows/ patio doors, and the smoke or carbon monoxide detectors and where they’re located throughout the home. Check with an expert if your home is lacking in any of these areas, in order to determine what costs to expect.


10. Drainage/ Grading Problems:

This may be the most common problem found by home inspectors, and is a widespread catalyst of damp and mildewed basements. Solutions to this problem may range from the installation of new gutters and downspouts, to re-grading the lawn and surrounding property in order to direct water away from the house.

 

 

 

Speak to Kristy Dusdal about acreage for sale in Abbotsford.  Kristy is one of the experienced Abbotsford realtors.  View Abbotsford real estate listings now to find your dream property.

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