Valuation

When it comes time to sell, you want to be sure that you get a fair market value for your home. There are many factors that affect fair market value. Some are intrinsic to the property itself. Size, condition, amenities, age and many other factors all affect value and you will certainly have heard that old real estate mantra “location, location, location”. But, equally, exogenous factors such as interest rates, market liquidity, and demographics influence the demand and supply equation that ultimately determines the value of your property.

A number of methodologies can be employed to estimate market value. But at the end of the day market value is the price a willing buyer would pay a willing seller in an arm’s length transaction after proper marketing where each of the parties acted knowledgeably, prudently and without compulsion. The trick of course is figuring out that price before your home goes on the market.

Proper pricing is critical. No amount of advertising or promotion will overcome improper pricing. Overpriced listings are quickly written off by comparison shopping buyers and agents alike.

My-Bermuda-House has retained the services of a qualified property appraiser, and we can arrange for a formal valuation of your property for a reasonable fee, should you wish. 

Short of this, we can help you to arrive at a good estimate of market value by using recent sales data to prepare a Comparative Market Analysis (CMA). The CMA will allow you to assess the value of your property based on the sale price of comparable properties across the island. It shows the range of prices for similar homes and helps to guide you to an appropriate listing price.

Among the real estate fraternity, the CMA is generally regarded as the best way to determine a home's value. By comparing your home with other properties that have recently sold, and factoring in weighted variables such as location, sale price, ARV, age of house, size of house, lot size, and amenities, we can place your house in a continuum of value. For example, there might be a property just like yours with one more bedroom and so, all things being equal, that house would be valued higher. We take this into account in coming up with your estimate.

We normally try to select comparables that are close to your property. However, in a small market like Bermuda this isn't always possible and anyway there are always exceptions to the rule. For example, a home within a hundred yards of yours might not be a good comparable because it has phenomenal water views. Likewise, a comparable house might be in a different parish, but would be weighted differently based on its location. 

While we try to pick comparables that are similar to your home based on physical similarities, you probably know more about which homes are really like yours based on your knowledge of the area homes and neighborhood. So, from among the homes we've listed, you may want to place more emphasis on ones that you think are particularly relevant to yours. We will work with you to arrive at a refined value.

We also know that values can change over relatively short periods of time. Ideally, the most recently sold homes will have the strongest bearing on what your home will bring, but in slower markets, you might not have that luxury. As a rule of thumb, we aim for properties that have sold in the previous 3-4 months, but if not, then we look back 6-8 months. In some cases, transactions that occurred two years ago are still considered comparable.

Finally, we know that every address has a set of unique factors that influence value. For most properties, My-Bermuda-House has compiled a list of comparable transactions based on the data we have — but we realize that data is just the beginning. In many cases your own knowledge of homes in the area is the best barometer of value. So we work with you to identify and weight individual characteristics in order to refine the estimated value of your home. Among the criteria that might affect the price are:

• Location: Is the property in a neighbourhood that buyers consider attractive?
• Interior condition: How much renovation work will a buyer have to undertake?
• Curb Appeal:  Is it neatly landscaped?
• Exterior Condition:  The condition of the roof, paint, chimney, driveway, fences etc matter to buyers.
• Traffic Noise:  Is it located on a busy street?
• Schools:  Is it convenient for school?

These criteria are subjective and usually more difficult to quantify, and they could boost or detract from a property’s value. Nevertheless, it is important to factor in these and other variables to the pricing equation.