When you want to sell a home, its value depends on what the willing buyers will pay. However, every buyer has a different outlook and assessment. For example, one might weigh size and condition of the house over location. In this article, we outline the most essential factors that influence the value of a home.
How Does It Compare With Neighboring Homes?
One of the most reliable indicators of the value of your home is price of similar homes in the neighborhood. These comparable homes are commonly referred to as comps. Whether it is a comparative market analysis or a home appraisal, the assessment is done by an agent or opendoor evaluatio. In most cases, however, real estate experts rely on comparable homes to estimate the value of your home.
The challenge with this is that no two comparable homes are the same, meaning you will have to make adjustments for crucial differences. Doing this manually can be very difficult, especially when comparing granular details like proximity to a good school, ceilings, or something tertiary like scenic view. In short, you will need to account for each of the different features, meaning you have to research several comps.
Luckily, you can do so through your computer. You can combine a detailed data model that analyzes thousands of pairs of comparable homes within a given address and give listings from pricing experts. You will then have a competitive cash offer which can simplify the entire process.
Where is it Located?
You might be very comfortable with the current location of your home— near your hometown or close to your job. However, when the appraisers start evaluating how much value to assign your house based on its location, they will look at the following key indicators:
- Employment opportunities
- The quality of local schools
- Proximity to shopping, recreational, and entertainment centers
These factors can influence the value of your home, and that’s why some areas have higher value than others. Furthermore, a home’s proximity to utility lines, highways, and public transit can have an impact on its overall value. When it comes to calculating the value of a home, location is more crucial than the size and condition of your house.
The Local Market
You can have a house in perfect condition, in an ideal location and with premium upgrades, however, its value will be affected by number of similar properties in the area. Note that the number of similar properties listed for sale can significantly affect the value of your home. If more buyers are competing for fewer homes, then the sellers have an advantage. However, a market with more sellers than buyers makes it advantageous for the buyers.
They will be able to tilt things in their favour. Keep in mind that you can still get very low offers even if your house is in perfect shape. This is why experts advise that you should weigh the market before putting your home on market. Deciding to sell it when everyone else in the neighborhood is doing the same can significantly reduce the value of your home.
What is Its Size?
Size is an important aspect when it comes to estimating the value of your home. Bigger homes tend to have higher valuations. Usually, the value of a home is estimated in cost per square foot. It is also important to note that the price buyers are willing to pay per square foot can vary significantly. Depending on where you are buying, a certain amount can be too low for a particular house while at the same time, it can be a bit fair for another. In calculating the square footage, attics, garages, and basements are not counted because they are seen as irrelevant.
In simple terms, if you have a 3,000 square foot home with 800 square foot garage, that is only 2,400 square foot livable space. Most buyers will only be interested in the livable space. Bathrooms and bedrooms are the most valued when it comes to livable space. So, the more bathrooms and bedrooms your home has, the more valuable it will be.
How Old Is It?
Normally, homes that are newer have a higher value. When the critical parts of your home like the roof, electrical appliances and HVAC systems are newer, they are less likely to break down. This increases their value because the buyer won’t spend money fixing them. Other areas of your home like the deck also play a role in determining the value. Old and rusty decks can lower the value of your home. This is why it is important to get them fixed.
You can build or repair them by getting in touch with professionals. A buyer will not prefer a home with old or worn-out decks. This is why most buyers want to do a thorough inspection of the house before buying it. It is important that you improve the condition of your home before buying it.
Now that you know the factors that can affect the value of your home, you are in a better position to estimate the price. You can also research on other factors basing on your local real estate market.