March 12th - 2009

Tips to pricing a heritage property

In today’s real estate market brokers and salespeople are often asked to suggest a value or asking price for heritage properties.

In today’s real estate market brokers and salespeople are often asked to suggest a value or asking price for heritage properties. During my working career, over the past thirty years or so, I have seen heritage properties go from something of a curiosity to something of increased and growing value. There is a simple three step process that a salesperson or broker can follow to establish a creditable price for a heritage property.


As in most pricing situations in most circumstances, no property can stray too far from the median price being paid for similar properties in an area, without getting into serious marketing trouble. This is why individually located heritage properties always attract lower prices and are more difficult to sell, than those located in ‘Heritage Conservation Districts’.


The first step in the process starts with pricing the heritage property as if it were a typical home in the area, based on number of rooms, lot size and condition, etc. This would be the same process a salesperson would carry out when suggesting an asking price for any property. Market conditions, past listings, sales information and experience are relied upon in making this judgment.


The second step would be to subtract from this price the cost of installing or upgrading any amenities that would normally be found in the area. One of the anomalies of heritage homes is, that while people often romanticize over owning an early Empire, Queen Anne or Georgian style house; they seldom dream of owning a house with an 1850s kitchen, bathroom or heating system.


The third and final step is to add to this the value of the property’s heritage attributes. These factors add an extra dimension to the property and they must be recognized and priced. For example, does the property have design or physical value because it is rare, unique or an early example of a style, type, expression, and material or construction method. What are its significant architectural elements such as windows, doors, chimneys, porches or other relevant structural features? Are its physical qualities well crafted? Is it in need of restoration, or has it been restored? Does it have an association with an event, person or organization significant to the community or country?


How to get heritage property information
Fortunately, it is not necessary for the salesperson to become a heritage expert or specialist, in order to get the heritage and historical information needed to complete this documentation. Chances are that it has already been done for you by the local Municipal Heritage Committee (MHC). The Ministry of Culture recently reported that 141 municipalities in Ontario now have MHCs and that they represent locations covering some 89% of Ontario’s population.

Classic revival property

Armed with this information, it is now time to put a price tag on the property. This is done through a simple comparative process. Ask yourself, would people pay as much for this or that, as they would for example, for an in-ground swimming pool? Or, is the fact that the building has a rare and distinctive brick pattern equal to having a laundry on the upper floor? Fortunately you know the market, and this will help you evaluate each significant heritage or historic attribute by equating it to some other standard house feature that you price every day. This process is very subjective, and therefore, sometimes irrational. So you might want to consider having some of your colleagues join with you in this process.


After a while, the feedback effect will take hold as you come in contact with more heritage properties, and more prospective buyers and sellers express their attitude towards heritage attributes. It will all begin to make sense and you will find yourself becoming increasingly skilled and knowledgeable about pricing heritage properties. Experience is the best teacher.


Robert Hulley is a retired accredited appraiser, real estate broker and mortgage broker. He is currently President of the Credit-Humber Branch of the Architectural Conservancy of Ontario.

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