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Calgary Home Market Evaluation

For many, the prospect of buying or selling a home can be daunting; especially
for first time home buyers. One of the best ways to protect yourself, get top dollar for your home and to
alleviate the stress associated with the purchase or sale of a home is to get a
Home Market Evaluation from a Calgary Realtor.

Home prices vary from place to place and Calgary is no exception. When you
consider Calgary’s proximity to Edmonton, the Canadian Forces bases and many
of Canada’s national parks, many of Calgary’s surrounding areas Home Market
Values are on the rise. How do you know if you are getting a good deal or if you
are selling your home for what it is worth? That is where a Calgary Home Market
Evaluation will come into play.

A Calgary Home Market Evaluation, also known as a “Comparative Market
Analyses” or CMA for short, is a process whereby a local area real estate agent
determines the market value of your home and the market conditions.

A Calgary Home Market Evaluation/ CMA, can differ by agents and can vary
on the information that is included in the report. However, most reports usually
contain some or all of the following data items:

Active Listings

Active listings, as one would imagine, is simply the homes in your area that are
currently listed for sale. In reality, this is your competition. It cannot be stressed
enough that active listing sales prices are not indicative of true market value.
This is due in large part to the fact that sellers can ask whatever they want for
their home.

Remember, what a house is “listed” at is entirely different that the price is actually
sells for. Sales prices do not reflect true market value until they are sold, it is one
of the reasons why appraisers will only use homes that have sold in the recent
past as their “comparables.” Furthermore, in a buyer’s markets, most sell for a
less. The reason for the inflated price is to allow for negotiations and for sellers
concessions.

Pending Listings

Pending home sales are a listing of homes that were formerly active listings but
that are now under contract. In other words, these are homes that were on the
“active listing” and someone wants to buy it but have not yet paid for it. These
homes cannot be listed as a “comparable sale” until they have actually closed;
thus, the reason for this section of the CMA. Furthermore, unless the agent who
listed the property is willing to share information with you, and many will not,
you will not know what the final sales price of the home is until after the closing.
However, pending sales do provide and indication as to which way the market
is moving and should also give you an idea as to how long you can expect your
home, if you are selling, to be on the market.

Sold Listings

Homes that have closed within the past six months are your comparable sales.
A CMA should be using these homes, almost exclusively if possible, when he generates
an appraisal of your home for the buyer. Comparable sales are really the only
number to be concerned with, as these will dictate your homes market value.

Off-Market / Withdrawn / Canceled

These properties which were taken off the market. The reasons for a home
being de-listed can be many. However, it is usually due to the homes being over
priced for the given market. The median prices of this listing of homes will almost
always be higher than the median prices of comparable sales data set.

Here are some other reasons why a home may fall into this data set:

Seller’s remorse: The sellers decided, for what ever reason, that they
cannot part with their home and no longer wish to sell it.

Low-Ball Offer: Nobody made an offer on the home or the only offers that
were received were low-ball offers which fell outside of the sellers desired
sales price.

Contract expired: The listing agents contract with the home seller expired,
in other words, the “DOM,” days on the market, were too long. Key point to
remember here is that most agents will withdraw listings so they can relist
them as a “new listing,” and fool perspective buyers.

Repair requests. The are homes that were formally in the “pending” data
set but were removed after the home inspection reported that a home
needed repairs which the seller was unwilling to perform.

Seller fired the agent: Similar to a contract expiring, only in this instance,
the sellers are not happy with an agents performance and terminated the
contract prior to expiration.

Expired Listings

This is the group of homes that will more often than not, reflect the highest
median sales price. This occurs because the homes did not sell due to being,
usually, unreasonably priced. Some of the expired listings could also fall under
this category for many of the same reasons as those found in the off-market/
withdrawn data set. Remember, many of these homes could also show up as an
active listing simply due to the fact that they were listed by a new agent at a new
price.

Examining Comparable Sales

Comparable sales are those homes that sold that most closely resemble your
home. Make sure that you are comparing apples to apples here. For example,
make sure the bedroom and the bathroom counts are the same or as close as
possible, that the square footage of you floor plan is comparable and that you
have the same number and type of amenities. For example, if your home does
not have a pool and the one you are comparing it to does, then obviously the
one with the pool is more desirable and will thus command a higher home value.
Also, make sure the years the home were constructed are as close to each other
as possible. All things being equal, a home built in the 2000’s will obviously
command a higher value than one built in the 1970’s.

Everybody knows that real estate is valued on “location, location, location,” but
have you considered what this means to you, exactly? For example, a home with
a view of the city is worth more than a home facing a highway. Homes located on
busy thoroughfares are worth considerably less than homes located on a Cul-de-
sac.

Remember, a Calgary Home Market Evaluation is just one of the tools you
should use when buying or selling a home.

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