Selling a home is both exciting and intimidating. We become attached to our house, condo or plex, because we’ve made so many memories there! At the same time, it’s an opportunity to move on and make a profit.
As soon as you consider selling your home, you start wondering about its resale value. The same question may arise in the case of a couple’s separation or estate planning, for example. How do you determine this value? Who can help?
- In this article, you'll learn which factors influence the resale value of a home, including its location and the state of the real estate market.
Real estate brokers play a central role in determining the selling price of your home. Thanks to his expertise of the local market, he is able to establish a pricing strategy adapted to your objectives.
What you need to know
The municipal assessment value is used to establish your property taxes; it is not a reliable resale value, and you could lose a lot of money by listing your home at this price. A real estate broker or chartered appraiser has access to all the tools needed to estimate the fair market value of your property. Meeting with several brokers and receiving quotes is free! Use our form to get started.
What role does a real estate broker play in determining the resale value of your home?
Assessing the value of a home requires knowing and using the right method. That’s what real estate brokers do. There are a number of key steps involved in assessing the market value of your property, while attracting the right profile of buyers.
Market value: amount a potential buyer would be willing to pay for your home, under current market conditions.
Municipal value: assessment for taxation purposes that does not take into account the current real estate market. It represents an average market value for your type of home, calculated every three years.
Comparable sales analysis
Approved brokers and appraisers have access to Centris tools, via their personal access code, and can view a directory of all recent and past transactions.
Using the information they find on this site, they examine recent sales of properties similar to yours in your neighborhood or region. Based on these comparables, the broker can evaluate the prices of homes with features similar to yours:
- Location
- Surface area of land and building
- Number of rooms
- Number of bathrooms
- Number of floors
- Age of property
- Property condition and renovations
- Presence of a swimming pool, garage or other outbuildings
Comparables make it possible to target a competitive and realistic price based on recent sales, but also to adjust this price according to current market conditions.
Ideal match
Your fourth neighbor sold his house two weeks ago. It has three bedrooms, like yours, and your lots are roughly the same size. Neither of you has made any major renovations since the house was built in 2010 and 2012. Your asking price is likely to be similar to this neighbor's!
Your broker should find at least three comparable properties. If there aren’t any in your immediate area, he may move a little further away or find a property that’s a little different (but not too different!).
Example of comparables analysis
House to evaluate in Longueuil, 2009, 1800 ft2, 3 bedrooms, 2 bathrooms, 1 garage
| Evaluation | Comparable A | Comparable B | Comparable C |
|---|---|---|---|
| Location | Longueuil | Longueuil | Longueuil |
| Year of construction | 2016 | 2010 | 2011 |
| Price list | 360 000 $ | 360 000$ | 350 000 $ |
| Living area | 1750 sq. ft. | 1900 sq. ft. | 1700 sq. ft. |
| Number of rooms | 3 | 4 | 2 |
| Number of bathrooms | 2 | 2 | 2 |
| Garage | No | Yes | Yes |
| Price adjustment | 0 $ | - 20 000 $ | + 20 000 $ |
| Value | 360 000 $ | 340 000 $ | 370 000 $ |
Averaging the three values, we arrive at a price of $356,667 for our home.
How to choose the right real estate agent?
Why choose at random when you can work with the best in the business? In a competitive real estate market, the right agent can turn the sale of your home into a guaranteed success.
Here are five essential criteria for selecting the one that will really make the difference:
- Valid OACIQ brokerage permit
- Local expertise
- Affiliation with a recognized banner
- Proven, high-performance sales track record
How does the uniqueness of your home influence its value?
Each house has its own particularities that can either increase or decrease its market value.
Features that can increase value
- Bordering a watercourse
- Landscaped yard, pool, finished basement, etc.
- Close to schools
- Constructed from top-quality materials
Special features that can reduce value
- Outdated kitchen and bathroom
- Renovations, such as changing the French drain or windows
- Neighborhood of low-quality houses
- Presence of hazardous materials such as asbestos or pyrrhotite
Several factors can justify a higher price than the average for comparable homes. On the other hand, work to be carried out may lower the price.
The broker adjusts the price accordingly to reflect the property’s strengths and weaknesses.
In rare cases, the comparable method is not the most appropriate. The cost method can be used for truly unique homes with no comparables. The income method can also be used for income properties such as rental cottages.
A negotiation strategy based on the current market
Another determining factor in setting the sale price is the state of the real estate market at the time you put your home up for sale.
- Is demand strong in your sector?
- Is it a good time to sell a house, condo or duplex?
- Are there many similar properties for sale on the market right now?
- Do you need to sell quickly?
In a high-demand market, the broker may advise you to set a price slightly above the average, as buyers are often willing to pay more to obtain a property.
Conversely, in a slower market, he may suggest a more aggressive price to attract offers quickly. The same applies if you’re in a hurry to sell, whatever the state of the market.
Its aim is to strike the right balance between an attractive price for buyers and a satisfactory amount for you, the seller.
Sometimes, a broker may recommend that you set a price slightly below the market to generate more interest and potentially trigger a higher bid.
For a seller, outbidding is a dream come true! Talk to brokers to find out if your home is a good candidate.
What's one-upmanship?
Overbidding occurs when several buyers are interested in the same property. It could be a plex in good condition with all the units empty, or a single-family home in a highly sought-after neighborhood, for example. In such cases, buyers will offer more than the advertised price. In fact, a house listed at $450,000 can be outbid by more than $500,000.
As a strategic advisor to help you set the optimum price, your real estate broker will help you sell at the best possible price.
What are the consequences of incorrectly estimating the sale price of your home?
Choosing to sell your home yourself based on your instincts or the municipal assessment roll could leave you in a bind. A poor assessment of your property’s value could :
- Make you lose money if the asking price is too low.
- Prevent you from selling within a reasonable time if you ask too much.
- Force you to lower your price.
A good broker will help you avoid the worst mistakes!
Determining the resale value of your home without a broker
Suppose you’re not planning to sell any time soon, but someone approaches you with an offer. How do you know if it’s fair? To sell without a real estate broker, you can call on the services of a chartered appraiser to provide you with an analysis of comparables and a clear idea of your home’s market value.
If you like to do things yourself, some databases let you see the prices of real estate transactions near you. Compare your home with at least three different properties. You can start with sales registered with the Registre foncier du Québec. It’s time-consuming and tedious, but you’ll get there!
For each comparable, you will need the lot number of the house on Infolot. Rendez-vous ensuite sur le site du land registerwhere there is a $1 consultation fee.
Complete your search by analyzing the prices of properties posted on Centris. They’re not yet sold, but the photos may help you find comparables very similar to your home.
Why do we say that location is ultra-important?
One of the main factors determining the value of your home is its location. You can’t really move the house, but you can redo the interior. That’s why you need to pay attention to this factor. Where is it located? A well-perceived city, but also a sought-after neighborhood within that city, is crucial.
Examples of the impact of location in Montreal
Quartier Rosemont Petite Patrie, median value, single-family home: $905,000
Quartier Villeray St-Michel Parc-Extension, median value, single-family home: $635,000
Location can account for up to 30% of a property’s valueor even more in certain resort areas. A house located in a neighborhood in demand, close to services (schools, hospitals, shops) and in an area where employment is abundant, will be worth much more than a house in a more remote or less economically dynamic area.
Bedrooms, bathrooms and furnished areas
The number of bedrooms and bathrooms is another key factor in assessing a home’s resale value. These features generally represent between 30% and 35% of total valueWith the exception of certain properties such as studio flats. An extra bedroom can significantly increase the value of a home, especially in markets where families with children are the main buyers.
Rooms
In a classic family home, a three- to four-bedroom property sells more easily than a one- or two-bedroom home.
Bathrooms
A house with only one bathroom can lose value compared to a house with a bathroom attached to the master bedroom and a secondary bathroom.
Modern bathrooms, with spacious showers, freestanding baths and quality materials, are also highly sought-after and can increase the value of your home.
It’s also important to consider the distribution of rooms: a poorly laid-out house with several small bedrooms could be worth less than a house with fewer rooms but better distributed rooms. Other internal features, such as a finished basement or garage, can also contribute to the value of the house.
House condition and renovations
The condition of your home can significantly influence its resale value. A house in need of a lot of repairs or renovations will be much less attractive to buyers.
Turnkey solutions and are very important to buyers to buyers!
Recent renovations can increase the selling price. With a little luck and the right broker, you’ll recoup your investment and more!
Some renovations are more profitable than others in terms of added value. Here are a few examples of renovations that add significant value:
Beyond major cosmetic and practical renovations, regular home maintenance is crucial to maintaining value. A roof and foundation in good condition, well-maintained plumbing and an electrical system up to standard are all aspects that buyers will take into account.
How do the real estate market and interest rates influence the value of a home?
The real estate market is constantly evolving, influenced by many external factors such as interest rates, the local economy and inflation.
Interest rates
Interest rates have a direct impact on your ability to get a mortgage. Buyers can afford more expensive homes when they pay little interest. By early 2025, economists are predicting further rate cuts, which normally have the effect of bringing more buyers to the market.
Local market
Each region of Quebec has its own real estate market. Quebec City, for example, has had a very buoyant market recently. Generally speaking, in more remote or rural areas, home values can stagnate. So it's important to understand how the market is evolving in your area.
Ready to set the selling price of your home? Call on the best real estate agents in your area!
Although you can get a general idea of your home’s value based on the factors mentioned above, it’s always advisable to call in the professionals for an accurate appraisal.
An experienced real estate broker has all the strings to his bow: expertise in establishing the selling price, mastery of negotiation strategies to obtain the highest possible value, etc.
The Clic Agents form is 100% reliable, free of charge and without obligation for you. It gives you the chance to compare 3 of the best real estate agents in your area.
