What is Value? A Guide to Understanding What a Home is Actually Worth

What is this home worth? This is one of the questions I get asked the most. There are a few different ways to look at value; there is the home's assessed value, market value, value to the Seller, and the value to the Buyer. 

Assessed Value - The home's assessed value is determined by BC Assessment and is used to determine the amount of property taxes you will pay every year. I often get asked why is a home priced above or below the assessed value. There are a few factors - the assessed value loosely follows the market, it's always somewhat far behind the market, and it is only updated once a year. For example, my 2023 assessed value was determined on July 1, 2022. The market is quite different now than it was then and a lower assessed value can actually be a good thing - less taxes! 

Market Value - The home's market value is determined by a Comparative Market Analysis (CMA), which is typically done by a local real estate agent. This takes many factors into account such as the current market condition, recent comparables (active, pending, or sold listings for comparables properties), the condition of the home, zoning allowances, and more. Regardless of the price the Seller paid originally or the assessed value, the market value is determined by market forces and is the most accurate and objective value of a home. 

Value to the Seller - This is what the Seller feels the home is worth, which may be subjective. Seller's usually have an emotional attachment to the home and had purchased it because the home suited their wants and needs. When listing the home, Seller's determine the market value with their realtor then strategize a list price to attract the highest amount of Buyer's while achieving the highest purchase price possible. The list price could be a combination of the value to the Seller and market value. The value to the Seller is also likely to be a factor during negotations. 

Value to the Buyer - As a Buyer, the value of a home is what the home is worth to YOU. It's the number you would feel comfortable paying for the home with absolutely no Buyer's remorse. As a Buyer making an offer, you will have likely toured comparable properties and we will complete a CMA so you can determine a fair price to offer. Just because you make a fair offer, doesn't mean the Seller will agree to it - at this point, you'll have to decide what the home is worth to you and how badly you want to purchase it! 

So what is this home worth? The answer is, it depends who you ask! 


SOLD! Top Tips for a Successful Sale

You've decided to sell your home, now what? This is a big decision, but I can help! Here are my top tips for preparing your home for a successful sale. 

Consider a pre-listing home inspection - Getting an inspection before listing your home will make sure there are no surprises when a potential Buyer comes along. You’ll have the opportunity to make repairs (maybe ones you didn’t know you needed to do!) or price your home accordingly. This shows transparency and can be a negotiating tool for you. 

Complete minor touch ups and repairs - Even if you didn’t get a pre-listing inspection, you can still do a “once over” of the home and make sure everything is in proper working order. Fix leaky faucets, change lightbulbs, patch any dings or scratches in the walls, etc. 

Consider repainting - Repainting your home a neutral colour can help appeal to a wider Buyer pool. It makes it more inviting and easier for a Buyer to imagine themselves living there. It helps boost the potential Buyers’ first impression. 

Clean and declutter - It’s important to do a deep clean, then maintain it. Declutter the surfaces and main spaces (put everything away - the less on the counter, the better) and depersonalize your home in preparation for a sale. Your home will be looking it’s best! 

Price it right - Pricing your home is crucial for a successful sale. Pricing the home too high could deter potential buyers and cause the sale to take longer than it should have. Pricing the home too low may get you a quick sale, but you could be leaving money on the table. It’s important to have a pricing strategy that reflects the current market conditions and comparable homes.

Hire a realtor - Having a realtor you can trust will result in a successful sale. Your realtor will guide you through the process as well as provide expertise on pricing your home, preparing your home, marketing strategies, and negotiations. 

Contact me for a copy of my Seller’s guide with more tips on how to prepare your home for a successful sale!


Are You a First Time Home Buyer?

Find out if an FHSA might be right for you! Here's what mortgage professional @Alexmortgagemanagement says you need to know about the FHSA:

What is the FHSA?

The FHSA is a new registered savings plan for Canadians saving to buy their first home. It combines the best of the RRSP and TFSA methods of saving for a first time down payment!

Who is it for?

This new program is available to Canadians over the age of 18 and only for first-time buyers (some exemptions apply).

What are the benefits?

-Like an RRSP, contributions are tax-deductible

-Like a TFSA, qualifying withdrawals will not be taxed

-Earnings on your investments inside the account won't be taxed

-Unlike an RRSP, there is no withdrawal limit so funds don't need to be repaid after the withdrawal

The basics

The contribution limit is $8000/year to a total of $40,000. Unused contribution room in one year can carry forward to the next year but only $8000 can be carried forward - making your new contribution limit for that year $16,000 (restrictions apply).

The fine print

You can transfer funds from your RRSP into your FHSA, but the amount cannot be deducted from your taxable income again. Be careful not to over-contribute, as you may be taxed 1% per month on excess funds.

If you want to double up, you can still leverage the Home Buyer's Plan to withdraw from an existing RRSP and your FHSA for a down payment.

When can I start?

All the Big Institutions have made statements that although the legislation opened the door to the FHSA on April 1st, most have to go through the administrative process of implementing a new account, so we can expect the accounts to roll out sometime this year. Meaning that even though the FHSA is live by the government, depending on your institution, you may not be able to deposit or access the $8000 for purchasing a home yet.

Keep an eye out at your bank because you'll likely see some promotional deals coming down the pipe when they are ready to launch!

Ensure you speak to your Accountant and Financial Planner to discuss the best option for you between the RRSP (HBP) or the FHSA (ideally utilizing both) depending on the timing of your purchase.

Still have questions? Wondering if this is for you? Let's connect!


Everything You Need to Know About Buying a Condo (or Townhome)

Buying a home is very exciting purchase! When considering a condo (or townhome), it’s important to make sure you’re informed about stratas and how that effects you.

  1. The Strata: Before purchasing a condo, make sure to research the strata complex thoroughly including the strata bylaws, rules, and strata documents. Understand the monthly strata fees, what they cover and what the strata’s contingency reserve fund is. This will give you an idea of the overall complex and the financial health of the strata.

  2. Amenities: Some condos come with amenities such as a gym, clubhouse, common area, etc. Be sure to research what amenities are available.

  3. Age and condition: Consider the age of the condo and its condition. Are there any updates or renovations that need to be made? This will affect the overall cost of the purchase and ongoing maintenance.

  4. Pet restrictions: Some condos have strict pet restrictions, so make sure to review the bylaws to make sure your furry friend is welcome!

  5. Rental restrictions: If you plan to rent out the condo, make sure to research the rental restrictions. Though the government has lifted most rental restrictions, stratas can still limit short term rentals.

  6. Insurance: Condos typically require different types of insurance than single-family homes. The strata fee covers insurance for the complex, so you only have to get contents and deductibles insurance for yourself. 

  7. Location: Consider the location of the condo in relation to your daily needs. Is it close to work, shopping, and transportation? If you plan to rent it out, think about how its location will appeal to potential tenants.

  8. Size and layout: Consider the size and layout of the condo. Are there enough bedrooms and bathrooms for your needs? Does the layout work for you?

  9. Parking: Consider the parking situation at the condo. Is there enough parking for you and your guests? Is there a designated parking spot included with the unit?

  10. Resale value: Finally, think about the resale value of the condo. Will it be a good investment in the long run? Research recent sales of similar units to get an idea of what to expect.

By considering these factors and researching the strata, you'll be able to make an informed decision when purchasing a condo (or townhome). Be sure to work with a real estate agent who has experience in the condo market to help you navigate the process. Contact me if you’re looking for a condo or a townhome! 

P.S. Everything in this post can also be applied to buying a townhome. 


Real Estate 101: Your FAQs Answered

Buying or selling a property can be an exciting, yet complex process. It’s normal to have questions along the way. Here are some of your most frequently asked questions, answered. 

FAQ: How do I decide on a budget? 

One of the most important first steps is contacting a mortgage broker. Getting a pre-approval essentially decides the budget for you - the bank has the final say to how much money they are willing to lend you for the purchase. Once you have the pre-approval, you can decide if you want to use the maximum amount or go with something lower for more comfortable monthly payments. Having the pre-approval in place will also streamline the offer process and improves your ability to secure satisfactory financing. 

It’s also important to look at the big picture. You’ll also want to factor in your currently monthly payments like car payments, credit card payments, etc, as well as extra costs that you may not have had before like property taxes, strata fees, or utilities. It’s also important to prepare for closing costs which can cost between 2-4% of the purchase price for things like lawyer fees, property transfer tax, etc. If you want to talk costs and budgets, or if you need a recommendation for a trusted mortgage broker, let’s connect!

P.S. The golden rule of mortgage financing is - don’t make any big purchases between the pre-approval and getting the keys to your new home! 

FAQ: What should I look for in a real estate agent? 

A real estate agent plays an integral role in helping you buy or sell real estate, so it’s important to have someone you trust and who is working in your best interests. Check reviews and ask around; look for qualities like experience, market knowledge, communication skills, transparency, and reputation. 

Some examples of questions to ask are: How long have you been working as a real estate agent, and what is your experience in the local market? What services do you offer to buyers/sellers? How do you communicate with your clients? How do you handle negotiations? What is your marketing strategy for Sellers? What is your commission structure? 

FAQ: How can I make my property more attractive to potential Buyers? 

Making a good first impression to a potential Buyer is important. Enhance curb appeal by refreshing the exterior - this may include cutting the grass, cleaning the yard, washing the windows, or repainting the front door. Consider staging your home (you can stage it with your own furniture) - declutter, depersonalize, and rearrange furniture to create an open and inviting atmosphere. Make cost effective improvements - something as simple as repainting the home a neutral colour can make a huge difference to potential Buyers, other examples include minor touchups and repairs. Keep it clean and well-maintained, and create a warm and inviting atmosphere - make sure the home is show ready by keeping surfaces clear. Make sure lights are on and ensure there are no odours in the home. All of these things can help to make your property more attractive to potential Buyers. Contact me for a free copy of my Seller’s Guide, which includes a checklist for preparing your home. 

FAQ: What are the key steps to the home buying process? 

The key steps to Buying a home are getting pre-approved, finding a property you love, making an offer, completing due diligence before removing the conditions, then completing the sale and moving into your new home! It’s important to work with a realtor you can trust and guide you through the process while protecting your best interests. 

FAQ: What are the costs associated with buying or selling a property? 

For Buyers, the biggest costs associated with Buying a property are incurred during due diligence (home inspections, any other applicable inspections, appraisals, legal fees) and closing costs (property transfer tax, legal fees, and moving costs). Real estate fees are typically paid by the Seller, so this is not an additional cost to the Buyer.

For Sellers, the biggest costs are real estate fees and closing costs. Real estate fees (both for the Seller’s realtor and the Buyer’s realtor) are the Seller’s responsibility to pay. These fees vary so it’s important to ask your realtor what these are so you know what to expect. Closing costs can include legal fees, adjustments, and moving costs.

Typically, one can budget between 2-4% to either buy or sell a home. 

FAQ: What are the common conditions (also known as subjects) that are usually in offers? 

When making an offer, your realtor will recommend various conditions to include so you can complete due diligence on a home before committing to the purchase. The most common conditions are Financing and Home Inspections (for obvious reasons). Other conditions can include reviewing property document such a the property title, property disclosure statement, and property file. If the potential home is a condo, the offer would be conditional to reviewing the strata documents. The purpose of these conditions (or any other that may apply to your home purchase) is to ensure that you are making an informed decision. 

Buying or Selling a home is a complex process and there are many unique factors that go into each transaction. Getting preapproved is an important first step, but it’s equally as important to make sure you are working with a realtor you can trust! Your realtor will guide you through the process and make sure that your interests are protected and that you are making informed decisions. Contact me if you’re considering Buying or Selling!

MLS® property information is provided under copyright© by the Vancouver Island Real Estate Board and Victoria Real Estate Board. The information is from sources deemed reliable, but should not be relied upon without independent verification.