The Gist:

• Real Estate has 3 prices:

  • 1. List Price - The number or the rate on the listing. It is the price that we usually get to see when looking for property. List price reflects the sellers intention, or what the seller wants in exchange for the property.

    • We are used to environments where we pay the Manufacturer Suggested Retail Price (MSRP) for the products we buy, which is the number that is often set with science. In real estate, sometimes we deal with numbers that are set with dartboards.

    • Listing prices are often fixed according to the seller’s whims, which is why you will want to know the other two numbers to make an informed decision.

  • 2. Buyer’s Price - The number that the buyer wants to pay for the property.

    • It is almost impossible to get that incredible deal where the buyers number matches with the sellers number, but we are optimistic that it is possible to make such a deal and that is what we are solving for.

  • 3. Market Value - The price that you normally cannot see from the outside. Most property values are defined by location, characteristics, and condition— or what it is, where it is, and how well it is kept/what improvements it has.

    • When you consider these, you can start to see what market value is by comparing it with other properties that have been sold in the market within a reasonable amount of time.

• Using this information, we can come back to our clients and give them a “safe number”, which means that if something changed and you needed to sell THIS property in the next 60 days, this is the number we strongly believe, based on evidence, is how much money you will get back.

• Sometimes the numbers set by dartboards are lower than market value, and we have seen evidence recently that a property sold 6% over list price. That means market value and list price probably did not have the regular correlation that we have seen in the last few years.

  • 6% is a lot of money— if we consider the average price in Edmonton, then it would be over $20,000. The families we serve are often trying to deliver 18 summers to their kids, and $20,000 can be spent on some great experiences.

• Because the market value demand is shifting and overpaying is more likely now than it has been in the past, here are some tips to help avoid overpaying:

  1. 1. Make INFORMED decisions.

  2. 2. Help yourself to an expert. This may not necessarily be the first expert you come across, but look for someone who can answer questions like these to help you make informed decisions!

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