Below, we’ll discuss the different ways in which you can find out what a home is actually worth, plus if the method is effective. But first, let’s take a look at why checking the value of a property is so important before placing an offer on it.
Why Look at the Market Value of an MLS Listing in Toronto Before Making an Offer on It?
- Did you know that the house you’re looking at might be priced a little high? Yes, home sellers usually do this to leave room for negotiation. This means that if you put the exact asking price number on the offer letter, you’ll be overpaying. Yes, sure you can skip all this trouble and directly make a lower offer on the house. But it could be that the seller has not hiked up the asking price at all. The asking price of the home might be the same as its market value. In that case, you do not want to be making a lower offer on the house and offending the seller.
- Let’s say that you make a lower offer on a Toronto MLS listing. But the seller rejects it by saying that their house is worth much more. So what shall you do then? There are two options in your hand - you can show the seller data and facts that justify your offer price. You can prove to the home seller that you are not just making a random guess; you’ve done your research. Or you could argue without any solid data and lose out on your dream home.
How to Check the Value of a Home You’re Thinking of Buying?
1. Research Comps
Comps are the sold homes that are similar to the one that you've been looking at. Take a look at the sold price of these comps and you’ll have a pretty good idea of the actual value of your would-be home. But make sure the comps that you select for this task are accurate. We mean to say that the comps must have the same number of rooms, size, condition, style, and location as the one you’re eyeing. You can find the details about the recently sold MLS listings in Toronto on a real estate website.
How Accurate Is This Method?
This method is actually pretty effective in finding out the actual market value of a home. After all, this method uses recent data from the housing market. But you might find this task a tad bit difficult. That’s because it’s not that easy to find homes that are exactly similar. If luck is on your side, you might find a home that is almost similar to the home you’ve been looking at. But the sold price of the home could be much higher and you might not be able to figure out why.
2. Use Home Valuation Tools
The easiest way to find out the value of an MLS listing in Toronto has to be hands down a “free home valuation tool”. You can find a free AI home valuation tool on any real estate brokerage website. These tools can give you an estimate of the value of a home based on public records, recent sales data, and housing market trends.
How Accurate Is This Method?
You should not rely completely on the results given by these home valuation tools. That’s because these tools work according to algorithms and they cannot take into account a lot of things. For instance, the home’s actual condition, renovations, or any unique features. So, the value you’ll see in the home valuation tool might not be 100% accurate.
3. Take a Look at Property Tax Records
Every home has an assessed value. This is what the local government uses to calculate property taxes. True, the assessed value might not be the same as the market value of the MLS listing in Toronto. But these two values of the home will be pretty close. So, you can put a number on the offer close to the assessed value of the home.
In Toronto, the Municipal Property Assessment Corporation (MPAC) is in charge of this task. You can find the value of the home on the MPAC website. You would just need to enter the property address on the website and you’ll be able to get the details you need. Through this task, you can also see how much the property tax the owner is paying for the home. Or if the value of the house has gone up or down over time.
How Accurate Is This Method?
The housing market in Toronto keeps on changing. So, it’s possible the value of the MLS listing in Toronto has dropped or increased since the assessment. Also, it might not be that easy to get access to these property tax records.
What's the Best Way to Find Out the True Market Value of a Home?
You can use any of the above methods to find the market value of a home. But if you really want to make sure you’re not overpaying or underpaying for the house, you must get the help of an expert Realtor. Realtors have years of experience analyzing comps and helping buyers get their dream home at a fair price. They can give you a clear idea of what other buyers are paying for houses similar to the one you’re eyeing. Plus, the Realtor will advocate on behalf of you at the negotiation table and make sure you’re not overpaying for your new home. So, before you start the house-hunting process, get an expert Realtor by your side.