The Value of Real Estate

So, how much is your home worth?  Hmmm, interesting question and the answers will change depending on whom you ask. 

To determine a recommended asking and therefore likely selling price, a good Realtor will compare your home to similar homes that have recently sold.  What's a similar home?  A similar home to Realtors and the public is one that is approximately the same size (square footage), the same finishes (age of kitchen & bathrooms, upgraded flooring, windows, furnace, windows, roof, etc), the same lot size, same garage size, location (i.e. backing onto a park), etc, etc.

So, you probably think that your home is worth what it sells for.  Makes sense, right?  Not so fast...

Although your home might sell for a certain amount, lenders (banks, mortgage companies, etc) often hire appraisers to place a value on the home - particularly if the buyer is applying for a high-ratio mortage where they have less than 20% down payment.  Appraisers use the same criteria as Realtors, but with a more critical eye.  If renovations have been done but are more than 3-5 years old, then they are no longer considered upgrades.  Why?  Because now they are like most other homes.  As time goes on, most homes get renovated and upgraded to some extent.  This means that lenders likely place a lower value on the home than what the market seems to determine. 

Another area with a different value rating is the property assessment division of the provincial government.  Here in Ontario, MPAC is the governing body.   MPAC is notified of all improvements to homes where a building permit is obtained.  But, if renovations are done that don't involve a building permit, they won't know about it and therefore they will probably assess a home at a value lower than what the market will pay.  Plus, MPAC only updates the appraisals once every few years, but the market changes every month to some extent.

Yet another area of difference is how insurance companies value a property.  They also use appraisers - but in this case, they appraise the value of the property at it's replacement value i.e. how much would it cost to rebuild if a catastrophe occurred.  Because the land is assumed to still be there, the "value" of the home is just for the home, not the land.

So, you can see there are many different values of real estate.  If you're thinking of making a move in the near future, you'll want to have a value based on the current market i.e. what a prospective purchaser will most likely pay for your home. 

Here's where I come in!  I'm happy to provide you with a FREE market evaluation of your home.  I'm ready when you are.  Call me at 416-819-2509 or send me an email at

Professional service. Expert advice.


Jim Datlen

Jim Datlen

Real Estate Broker
CENTURY 21 Millennium Inc., Brokerage*
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