Value is a tough thing to nail down. When I go out to do a listing presentation or meet a seller about a property, I often feel the sellers are waiting with bated breath to hear that number. The one that is going to tell them that they can either afford to move on from their current home, start a new business or retire.

The thing is, there is no exact number that can be given when determining the market value of a property. Even the most knowledgeable of salespersons could not nail down an exact price. It’s a little fuzzy around the edges. There is some expertise involved for sure, but I feel determining the market value of a home is more like an educated estimation.

There are a lot of things that could effect the value of your house. If you’re selling, the market value of your home would depend on the marketing plan of your salesperson, how you stage it, what strategy you use to sell, when you sell it and a dash of luck.

Though the hard data of real estate statistics is often combined with a developed know-how of what buyers want as far as some real estate salespeople are concerned, there are those who will tell you an exact number when it comes to your property’s value.

The bank often sends out appraisers who try to determine the value of the house based on a renovation, the size of a property and the statistics in a given neighbourhood. MPAC or the Municipal Property Assessment Corporations also try to determine the value of a property based on the size of it, the neighbourhood you will find this property, the renovations done, and even the number of washrooms.

Sounds very thorough, right? Well, thorough does not always mean accurate. Values determined by MPAC do vary from the sold prices of many Toronto properties. As an example, the average property in Toronto sold for $776,684 in 2016. Those are actual sales. The real price a property sold. Now, the average assessment for MPAC for 2016 was $584,471. As you can see, MPAC often underestimates the value of the property. Not always. I have seen situations  where the value of the property  is well below the MPAC assessment. At the end of the day, however, it’s not a bad thing to have a low MPAC assessment. It will likely mean you will pay less property taxes than someone in your neighbourhood who has a higher assessment.

The only way to find the exact value of the house is to sell it.

At the end of the day, your house is only worth what someone will pay for it.

It may be the same size as the one beside it, but if a buyer comes along that really wants to live in you property, he or she or they will step up ready to buy that house for more and smite the competition.

If you are trying to figure out the value of a given property without selling it, here’s what I think about those giving you advice on the value:

1. Real Estate Agents: This varies. Some will try their best to give you a price range where your property will fall. Other less scrupulous real estate salespersons will tell you a price that is way too high to give you the idea that they can fetch you this number. If you list with them, they won’t get that high number and just keep lowering the price until it does sell. This approach where your home sits on the market for a long time is not the best way to maximize the value of your house. In fact, it will very likely work against you.
2. Appraisers: Like salespersons, their abilities to determine market value vary. They are rarely knowledgable about a neighbourhood, but from time to time, they are. If a buyer is buying an insured property then CHMC or Genworth will often send out an  appraiser. They tend to be more conservative. If you have a bank doing the appraisal, they tend to be conservative too, but less so than CHMC and Genworth in my opinion. One thing you should know if you bought a property and the bank, CMHC or Genworth is doing the appraisal, they will never appraise a property above what someone has paid for it.
3. MPAC: Generally, their market value assessment are low. More and more, I am hearing about MPAC assessing properties too high. Still, for the most part, MPAC assesses market value on the low side of things.

There are going to be a lot of people who are going to tell you the value of your property. Not just real estate salesperson, appraisers and MPAC, but your nosy neighbour, your Mom, you dogwalker and your gut.  And what you need to do is take it all with a grain of salt.

No one will be right, but your job is to determine who will do a better job of it than others. You may be wise to seek out a few professional opinions.

If you are selling, it really doesn’t matter the price a real estate salesperon gives you. Seek out the most impressive marketing plan and strategy. That’s what is going to get you top dollar regardless of the price tag someone tells you it should be.

And remember this as a last thought:  Time is the most important component of your home’s value. If your house was evaluated six months ago, then it would very likely not be worth the same now.