Determining the accurate value of a home is one of the most important steps in the real estate journey, whether you’re buying or selling. But how do real estate agents and appraisers actually pinpoint what a house is worth? And what are the common myths of a Home Evaluation? Let’s walk through the key factors in this process to give you insight into the magic behind determining a home’s market value—and help you make smarter decisions with confidence.

I’ve included a Free Guide that you can access Here!

The Myths of Home Valuation

Despite the data, there are a few common misconceptions about what really impacts a home’s value. These include:

• Seller's Investment Costs: What the seller originally paid for the property or invested in renovations doesn’t guarantee an increase in market value.

• Buyer’s Personal Preferences or Budget: While everyone has unique tastes, market value hinges on what the majority of buyers will pay, not individual preferences.

• Asking Price on MLS: Just because a property is listed at a specific price doesn’t mean it reflects actual market value.

The Key to Home Valuation: Comparative Market Analysis (CMA)

One of the primary tools agents use to determine a property’s value is a Comparative Market Analysis, or CMA. Here’s how it works:

Step 1: Selecting the Best Comparable Sales

Imagine you’re choosing “comparable” properties, or “comps,” that recently sold nearby to get an accurate benchmark for your own home’s value. The best comps meet three criteria:

• Location: Ideally, comps are from the same neighborhood or similar streets.

• Recency: The most useful comps sold within the last few months.

• Similarity: Properties that match in size, style, and condition provide the best reference points.

If you’re a seller, it’s tempting to cherry-pick the highest-priced comps. For buyers, the lowest prices may seem more favourable. But the best valuation is balanced, selecting comps closest to your property’s features and location.

Step 2: Adjusting for Differences

No two homes are exactly alike, so a good agent will adjust for the unique characteristics of each comp:

• Property Type: Detached homes generally hold the highest value, followed by semi-detached and row houses.

• Bedroom and Bathroom Count: More bedrooms and bathrooms typically boost a property’s worth.

• Location Influences: For example, homes backing onto scenic views generally fetch higher prices than those with less appealing views.

• Lot Size and Square Footage: Larger lot sizes and more square footage add value.

• Layout and Parking: An open floor plan and ample parking are major perks for today’s buyers.

• Condition and Finishes: Well-maintained, updated homes with quality finishes tend to command higher prices.

• Basement Features: A finished basement or rental suite can add significant value, especially if the suite is legal and up to code.

Step 3: Validating the Home’s Value

Once adjustments are made, a good agent will double-check for consistency by running additional analyses:

• Historical Analysis: By analyzing average market values from the time of the home’s last sale, we can estimate current value trends.

• Neighborhood Analysis: Reviewing the average sale prices of similar homes in the area over the past year helps establish a clear picture of the local market.

• Competitive Analysis: How’s the current competition? Analyzing the market’s “days on market” and whether multiple offers are common reveals a lot about a neighborhood’s demand.

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Curious About Your Home’s Value?

Discovering your home’s true worth isn’t about plugging numbers into an algorithm. It’s an art and a science, best done with expert guidance. If you’re curious about your home’s value in Calgary’s current market, get in touch for a no-obligation market analysis. I’ll provide you with a personalized, data-backed valuation to help you make informed decisions.

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If you’re thinking about renovating your home before selling, you need to take a look at this renovation guide!

In Calgary’s ever-changing real estate market, it’s no surprise that many homeowners look to boost their property value through renovations before selling. It’s a smart strategy, and when done right, it can often lead to a solid return on investment. But here's the catch—not all upgrades are created equal. Just because you’re spending on improvements doesn’t mean you’ll see every dollar back when the time comes to sell.

That’s why I’ve put together a renovation guide derived from ‘Harrison Bowker’ Real Estate Appraisers. It’s a fantastic tool that helps estimate the potential return on various home improvements. But remember, these are general guidelines. The cost of the renovation and the quality of the contractor can significantly affect your return. This guide assumes professional contractors are handling the job, so DIY projects may not yield the same results.

Now, let me be real with you—many homeowners are surprised by the modest returns on certain renovations. The reason? It’s easy to get emotionally attached to our homes, which makes it harder to step back and look at the property like a buyer would. That’s where expert advice and data come in. By making decisions based on facts, not feelings, you can focus on upgrades that offer the best bang for your buck.

I share this renovation guide with nearly all my clients, as many are curious about how certain updates might impact their home’s value. The key takeaway here is to manage your expectations. While some upgrades may make your home more attractive and help it sell faster, they don’t always translate to a higher selling price or a full return on investment.

For most homes, there’s a simpler, often more transformative, and less expensive option: staging. When done well, staging can enhance your home’s appeal in a way that even renovations sometimes can’t. It’s about presenting your space in the best possible light to potential buyers, and often, that can be just as valuable as a renovation—if not more so.

Click on the Get Guide button below to access the guide - Remember, every home is different, and an in home consult should always be conducted before renovating. Text: HOME to 403-479-8990 to set up your free in home consult. 

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