How much is your home worth? For many, it’s literally a million dollar question. But, unless you’re a keen observer of real estate market and values, you will at best be able to only give a ‘ball park’ answer.
Average prices for homes in Markham, Richmond Hill and throughout York Region are often increasing by a few percentage points each month and increased by 20.11% in 2016 (average price for resale homes of all types in York Region). So it’s difficult to know the exact value of your home.
Even reading the headlines might not keep you that informed about exact values. Price increases can vary widely from town to town, neighbourhood to neighbourhood, and even home to home on the same street. Strong evidence of this exists right here in York Region where average prices in Whitchurch/Stoufville increased a healthy 25.24% in 2016, but prices went up an eye-popping 52.72% on the other side of the 404 in King Township.
While healthy increases in real estate prices mean it’s a heathy market for both home buyers and home sellers, it can also lead to increased payoffs for unscrupulous agents and developers willing to take advantage of homeowners who are not fully aware of the value of their homes.
In one example of what homeowners should look out for, the Toronto Star recently reported that one Toronto real estate agent was warning homeowners against ‘lowball’ offers made before a property hits the market.
Homeowners in older neighbourhoods, like those in the heart of Richmond Hill and Markham, are particularly susceptible to the practice. Seniors who are selling a home they bought 30 or 40 years ago may have paid only a fraction of the value of the home today.
In 1979, the average price of a home in Toronto was $70,830, or about 10% of today’s average. That means even a ‘lowball’ offer can look very inviting because it can still represent many times more than what the homeowner paid for the home.
But accepting the offer can cost the homeowner tens of thousands of dollars. In one example used in the Star article, a homeowner became suspicious of an early offer from a buying agent who represented a developer. After the homeowner declined the offer and put the house on the open market, the home ended up selling for $75,000 more than the buying agent offered.
While the practice of making lowball offers is not illegal, buyers who approach sellers directly could be in breach of the Realtor code of ethics and, if so, they may face legal actions against them.
So does this all mean that you need to stay on top of the unprecedented increases in real estate prices, even in your own neighbourhood, to avoid being the victim of a low offer?
No, it doesn’t. Instead, if you take just a few precautions when preparing to put your home on the market, you can protect its full market value.
1. Do as Much Market Research as You Can
Not all of us are real estate experts, but you don’t have to be. From talking to family, friends and neighbours, to checking the facts and figures on the Toronto Real Estate Board website, there are lots of ways for you to be more informed about current market values.
2. Find A Reliable and Experienced Real Estate Agent
You’re probably already bombarded by real estate flyers in the mail, even agents calling or knocking on your door asking if you want to sell. Again, you can talk to acquaintances for their input and you can visit the Real Estate Council of Ontario (RECO) website and/or the ca’s “Find a Realtor’ web page for help in finding reputable agents.
3. Hire a Real Estate Appraiser
Appraisers can give you a good baseline value for your property from which you’ll be better able to establish its current market value. The best place to start your search for a good appraiser is on the Appraisal Institute of Canada’s website.
There’s One More Way that You Can Find Reliable Market Information and Advice – Whether You’re Buying or Selling a Home: Contact The Stephen Tar Team!