Nova Scotia Property Masterclass no11 - adding value and valuations
 

I'm no expert at all, quite the reverse, but I thought I would share my property experiences from top to bottom for anyone looking at property in Nova Scotia. I am not sure if what happens in Nova Scotia (or just here in the North Shore) is true of other areas but probably.

The saturation of TV programmes about adding value to your home has left few without knowledge and things are pretty much the same here - extra bedrooms, bathrooms, decks etc but here are some other things we have found:

Water access, however small and even if it leads to an eroding cliff edge, will currently add $10000 to the value, in our area.

Septic approval for land (even though not installed) adds more value than it costs to have done.

Cleared land, meadowland, has more value than uncut land (unless it is full of hardwood you can sell).

Landscaping, trees and shrubs because generally gardens are just layed too turf.

Adding a drive and calvert (drain under drive entrance in gully) to land even though there is no house.

Outdoor lights, taps, electric sockets for outdoor living.

Underfloor heating is the trend here.

Outbuildings with heat and light.

I'm sure people will add others.

What does not add value and why Sarah Beany would be out of a job:

Our local agents when they valued our property concentrated most on the land, how much there is, what is on it as regards services, and growth, potential for subdivision, and what it looks out onto. So the house is in fact very secondary.

Being secondary, interior decoration seems to make no difference to value at all (though I would argue it makes selling easier).

When three Real Estate agents valued our property last month they all did the same thing which we find a bit strange. Even though they work in the area, they go to the MLS database, key in criteria such as acreage, floor space, property type, if is waterfront etc and then the database spits out a list of properties sold to those criteria over a set time period. (this must be why decoration doesn't count becase it is not a box on the MLS).

If anyone studies the MLS property listings, or have looked at properties from it, they may be aware that what is in the details doesn't often correspond to reality and therefore it is a case of rubbish in - rubbish out. It also is determined by the agent using the right criteria. Two out of three correctly had us as "ocean view" but one didn't and the value was way out. As few of our type had sold they had to look in wider areas so we were compared with properties 50 miles away.

Then, worst of all, they gave us an average! We knew one in the list to have been near derelict and low priced so the overall valuation was artificially low. Also the valuation does not take into consideration properties sold privately or through such as Property Guys.

They did not look at "differences" only similarities which I think is a defect in the system. i.e. they do not seem to compare what a 2 bedroom bungalow sold for in the immediate area, in comparison to a 4 bedroom house, rather they "group" value. Maybe it is just agents here and hopefully someone can explain what happens.

I wonder if this a contributary factor as to why property prices have stayed low here, in that the valuation system will tend to add value in small doses? eg "this is the average price for houses of your type, on this type and amount of land" instead of "his bungalow sold for that, my house must be worth this."

It's a mystery but one to be aware of. I would say value yourself and if you are not selling privately go with the agent who comes closest. We have made "value" on our property simply by the fact they seem to have been undervalued to start with rather than general value increases.

Re: Nova Scotia Property Masterclass no11 - adding value and valuations
 

My experience is that there are two methods of valuing a house here:

1) Cost to Replace
The agent (or valuer) adds up the value of the land, typical cost for landscaping and digging well, installing septic etc and then adds the cost to build the house new (circa $130 per square foot multiplied by the square footage). So, in a subdivision near Halifax, it might go something like this:

Building Plot $70k
landscaping $20k
Well & Septic $15k
Build Cost $325k (for a 2500 sq ft house)
Total = $430k

2) Comparrison with sold properties
As described above they find 3 similar properties that have actually sold in the area and use this as a basis for whether the house in question should be worth more or less than them. So if the average price was $300k and the house in question is in "superior" condition the value might be set at $330k.

The first method doesnt really work for rural areas away from Halifax though. Thats because prices are generally way lower than the cost of a new build.

Of course neither of these methods means that the seller will be prepared to sell at the valuation price not that the buyer will be prepared to pay it - in practice buyers and sellers make up their own minds and a deal isn't done unless the figures meet.

Also, I would add to the above list: if you can afford it buy waterfront (as opposed to just water access or views of water). Its the best way of ensuring that you get maximum return for any improvements you make to or money you invest in the property. Also waterfront property generally sells much quicker.

Re: Nova Scotia Property Masterclass no11 - adding value and valuations
 

Would you mind sharing your experiences in a blog instead of here on the forum? I believe the blogs are for sharing the experiences and random diary notes whereas the board is more about asking questions and receiving answers.

Just my 2 cents.

Re: Nova Scotia Property Masterclass no11 - adding value and valuations
 

I actually think that general information like these property masterclass things should go in the wiki - I thought thats what the wiki pages are for. You are correct though - the forum is really for posing questions and people answering them

Re: Nova Scotia Property Masterclass no11 - adding value and valuations
 

Just after I hit the "send" button I thought of the wiki as well. That would be the proper place for this kind of thing.

Re: Nova Scotia Property Masterclass no11 - adding value and valuations
 

I think that this was suggested at about masterclass no 1 or 2