A home listed for $799,000 is not necessarily worth $799,000.
It may be worth more.
It may be worth less.
The asking price represents the seller’s pricing strategy. Market value is a separate question, influenced by comparable sales, competing inventory, condition, location, property characteristics and current buyer demand.
For Anna Alemi, an award-recognized Ottawa real estate broker with nearly two decades of experience, understanding that distinction should happen before negotiations begin.
“One of the first questions buyers ask me is how much below asking they should offer,” Alemi says. “I prefer to start with a different question: what do we think the property is actually worth?”
That changes the conversation.
Instead of negotiating against the seller’s number, the buyer begins by developing an independent opinion of value.
Is Asking Price the Same as Market Value?
No.
The asking price is selected by the seller and their representative as part of the property’s listing strategy.
Some properties are listed close to expected market value.
Others may be positioned below expectations to encourage interest or competing offers.
Some may enter the market at a price that current comparable evidence does not appear to support.
This is why a buyer who negotiates $20,000 below asking has not automatically secured a bargain.
If the property was overpriced by considerably more than $20,000, the buyer may still be paying too much.
The reverse can also happen.
Paying above an intentionally low asking price does not automatically mean a buyer overpaid.
The useful comparison is therefore not simply:
Offer price versus asking price.
It is:
Offer price versus supportable market value.
How Is a Home’s Value Evaluated Before Making an Offer?
There is no single formula capable of producing an indisputable value for every home.
A strong evaluation instead attempts to establish a reasonable range by considering multiple pieces of evidence.
Alemi typically looks at recent comparable sales, active competing listings, property type, micro-location, lot characteristics, condition, improvements, layout, parking, additional living space, days on market and current supply and demand.
The objective is not pretending to know the property’s value to the dollar.
It is developing enough evidence to understand whether the contemplated offer makes sense.
Comparable Sales: Nearby Does Not Necessarily Mean Comparable
Comparable sales remain one of the most useful sources of valuation evidence.
But another home in the same neighbourhood is not automatically a strong comparable.
Property type matters.
So do size, age, lot characteristics, condition, layout, parking, basement space and renovations.
Ownership structure can matter.
Condominium fees can matter.
The timing of the sale matters too.
And then there is something that spreadsheets do not always capture particularly well: micro-location.
Two similar properties several streets apart can produce different buyer reactions because of traffic, privacy, orientation, backing conditions or proximity to amenities.
No two homes are identical.
The purpose of comparable analysis is not to pretend they are.
It is to understand why the market may value the differences.
Sold Properties and Active Listings Answer Different Questions
Recent sales show what buyers have already agreed to pay.
Active listings show what today’s buyer can choose instead.
Both are important.
Consider a townhome listed at $650,000.
If six comparable properties are currently available between $625,000 and $660,000, buyers have alternatives.
If almost nothing comparable is available, the negotiating environment may be different even if the historical sales data looks similar.
This leads to one of the questions Alemi routinely considers with buyers:
“If we don’t buy this property, what else can we buy?”
The question helps reveal market leverage, but it serves another purpose too.
It reduces the emotional feeling that one particular home is the only opportunity that will ever exist.
The Ottawa Average Cannot Tell You What One Home Is Worth
Citywide statistics can provide useful context.
They cannot independently value an individual property.
Ottawa contains multiple property types, neighbourhoods and price segments, each with its own supply-and-demand dynamics.
A detached property in Stittsville may face different conditions from an apartment condominium closer to the urban core.
A townhome in Orléans may compete within a different buyer pool again.
Even properties within the same neighbourhood can perform differently.
Alemi’s view is straightforward:
“Nobody buys the average Ottawa home. A buyer purchases one specific property, on one specific street, against the alternatives available at that particular moment.”
That is the market that matters most when determining an offer.
Micro-Location Can Change the Equation
Neighbourhood is only the beginning of location analysis.
One property may back onto green space.
Another may back onto commercial activity.
One may sit on a quiet interior street.
Another may experience substantially more traffic.
Natural light, privacy, schools, parks, transit, walkability, lot orientation, nearby development and access to amenities can all influence buyer perception.
Automated systems may identify two properties as statistically similar.
A buyer walking through both may immediately experience meaningful differences.
Condition and Renovations Need to Be Evaluated Separately
Two homes with similar layouts and locations can deserve different valuations if their condition differs materially.
But buyers should distinguish between maintenance and improvement.
Replacing an aging roof may protect the property’s value without necessarily increasing its market value by the entire cost of the work.
Renovations work similarly.
A seller spending $100,000 does not automatically make the property worth $100,000 more.
Some improvements have broad appeal.
Others are highly personal.
As Alemi puts it:
“The market decides what an improvement is worth. The invoice doesn’t.”
What Can Days on Market Tell a Buyer?
Days on market can provide context, but it should not be interpreted mechanically.
A property that has been available for an extended period may warrant questions.
Is the price too high?
Is there a property-specific issue?
Has the seller previously rejected offers?
Is demand simply limited?
But longer market exposure does not automatically mean a seller is desperate.
Likewise, a property listed yesterday does not automatically justify paying a premium.
Days on market is one piece of evidence.
It becomes more useful when combined with the rest of the analysis.
Condominiums Require an Additional Layer
When purchasing a condominium, evaluating the unit itself is only part of the analysis.
The condominium corporation matters too.
Depending on the property and transaction, buyers may need to understand condominium fees and what they cover, reserve fund information, financial statements, insurance, rules, planned expenditures and the status certificate and related documents.
A unit that initially appears inexpensive can look different once the complete ownership picture is understood.
Purchase price is only one component of value.
Can AI or an Online Estimate Tell You What a Home Is Worth?
Automated valuation models and AI-assisted analysis can process substantial amounts of information quickly.
They can be useful starting points.
Alemi uses technology and data in her own analysis, but does not view them as substitutes for property-specific judgment.
An automated system may recognize similar square footage, age and location.
It may have more difficulty assessing how well a renovation was executed, how an unusual layout feels, why one side of a street attracts stronger demand or how a property’s condition compares with what the underlying data assumes.
“Data helps us identify patterns,” Alemi says. “Experience and context help us understand what those patterns actually mean for this particular property.”
The strongest analysis uses both.
Don’t Confuse Seller Motivation With Property Value
Buyers are often interested in why someone is selling.
Relocation.
An estate.
Another purchase.
A change in family circumstances.
Those circumstances may affect the seller’s negotiating position.
They do not automatically determine market value.
Buyers should therefore separate two questions:
What does the evidence suggest the property is worth?
and
What might this particular seller be willing to accept?
Those answers are not necessarily the same.
Anna’s Perspective: Establish Value Before Negotiating Price
After nearly two decades in real estate, Alemi says anchoring remains one of the most common problems she sees in buyer negotiations.
A home is listed at $900,000.
Suddenly $880,000 feels like a victory.
But what if the strongest evidence supports $850,000?
Now reverse the situation.
A property is listed at $850,000 specifically to encourage competition, while comparable evidence supports a higher range.
Paying $875,000 does not automatically mean the buyer made a poor decision.
“I want my buyer to develop an opinion of value before we become consumed by the negotiation,” Alemi explains. “Then we look at the asking price, the competition and what the property is worth to that particular buyer.”
Those are three different numbers.
Understanding the difference is critical.
Anna Alemi’s Five Questions Before Writing an Offer
1. What have the strongest comparable properties actually sold for?
Use the most relevant evidence, not simply the comparable that supports the number the buyer wants.
2. What else could the buyer purchase today?
Current alternatives affect leverage and perspective.
3. What makes this property materially better or worse?
Condition, layout, lot and micro-location can matter significantly.
4. What would the property appear to be worth if the asking price had never been disclosed?
This helps expose anchoring.
5. At what price would the buyer rather lose the property than continue bidding?
That number is easier to establish before emotion takes control of the negotiation.
The Bottom Line
Determining value before making an offer is not about ensuring that a buyer never pays above asking.
Sometimes the evidence supports negotiating below asking.
Sometimes it supports the asking price.
Sometimes a buyer may rationally choose to pay a premium for a scarce property that fits their needs exceptionally well.
The objective is not simply to win the negotiation.
As Alemi puts it:
“I don’t want a buyer leaving the transaction proud that they negotiated $20,000 off. I want them to understand why the price they paid made sense.”
That is a better measure of buying well.
Frequently Asked Questions
How do I determine what a house is worth before making an offer?
Review relevant recent sales, active competing properties, condition, micro-location, property characteristics and current supply and demand to establish a reasonable range.
Is asking price the same as market value?
No. Asking price is selected as part of the seller’s listing strategy and may be above, below or close to expected market value.
Should buyers always offer below asking?
No. The appropriate offer depends on the property’s value, pricing strategy, competition and the buyer’s objectives.
Are online home value estimates accurate?
They can provide useful preliminary information but may not capture important property-specific characteristics.
Do renovations increase property value?
They can, but renovation cost does not automatically translate dollar-for-dollar into market value.