What is our home worth? This age old real estate question is one of the toughest questions to answer.
Really, can anyone, even the most seasoned REALTOR, look you in the face and guarantee you a carved in stone, without a shadow of a doubt, take it to the bank price? We can forecast, speculate, advise, research and support a certain value but at the end of the day, until the buyer steps forward with the big cheque book, that “guaranteed price” doesn’t exist. So, what is your home worth? Well, given current market conditions, recent sales, supply, demand, time of the year and our marketing brilliance, we expect your house to sell in range “x”.
What’s the point?
Well, to help reinforce the concept, answer this multiple choice question:
QUESTION: What is this 1967 Ferrari 250 GTB worth?
(a) $275,000 (b) $2,750,000 (c) $27,500,000
The BIG answer to that question is what is it worth to a buyer given current market conditions, recent sales, supply, demand etc. etc.
Well, the correct answer was ‘c’. In this particular instance, a particular buyer felt that this ultra-rare Ferrari was worth $27.5 million dollars. Crazy? To you perhaps, but to that buyer, it was rationalized, logical and worth it.
Granted that car (feels like at that price, the word ‘car’ is far too simplistic) was sold at auction, market forces are still in play with regards to value. So, for a home that is rare, hard to find, beautifully finished or just has that something special, a premium will often be paid. How much of a premium remains to be seen until the day the offer arrives.
That is one concept that can make open houses more interesting for us. We can have 15 groups through the same house with feedback ranging from “needs a total renovation” to “quite nice, we could move right in”. How could the same property gather such different feedback? Well, that’s why they make chocolate and vanilla! And that is why establishing value, particularly for unique, one-of-a-kind, rarely found properties can be such a challenge.
Hiring competent, diligent and courageous REALTORS is an important first step!
– For the record, $27.5 could also have purchased the last 110 homes that sold in St.Catharines. Or just over 1,700 Chevrolet Cruze cars. Or 8 or 10 reeeeeally nice Muskoka cottages. …or a 45 year old car. Your choice!
Thank-you for visiting.
Patrick, Jim and Liana.