Curious about how much your house is worth in today’s market? Read this article to learn about the factors that determine the market value of a home.
More and more American homebuyers are feeling better about buying houses. The housing market is looking stronger than ever.
That’s good news for home sellers. You want buyers to be willing to spend a little extra to boost the overall value of your home.
Home sellers worry a lot about the value of their property. And yet, the truth is that your home is worth as much as someone else is willing to pay.
However, there are a number of important factors which determine the market value of your home. Check out the most important factors below!
1. Compare With Yourself to Your Neighbors
People mostly want to live in what is described as a “nice neighborhood.” Your home’s value is influenced by comparisons with other homes in your neighborhood.
These are usually called “comps” by realtors. This is perhaps the most reliable judgment of property values.
If you want to gather information on comps, you need to look at recently sold homes in your neighborhood. Ensure that you also consider homes with other similar characteristics, including size and shape.
Of course, you’re unlikely to find any like-for-like comps. There are always going to be important differences between the two homes. This should be taken into account when you evaluate the value of your home.
2. Living in a Good Location
The location of your home can make a significant difference in determining its value. However, the concept of a “good location” is subject.
For example, your home may be nearby your family and friends. It could be easy to get to your workplace from your home.
And yet, for prospective buyers, other location factors need to be taken into account. These factors normally boil down to the following:
- Are there any good local schools?
- What job opportunities are nearby?
- Are there lots of amenities, such as shops, restaurants, and entertainment?
If your home is well-located for the above factors it can probably demand a higher price tag as a result. Obviously, the buyer may have another priority.
Moreover, you should also weigh up the negatives of your location. Are you nearby a noisy highway?
3. The Size of Your Home is Bigger the Better
Almost every home buyer would agree that everything else being equal – “bigger is better.”
People want a spacious and large property. This is almost certain to boost the sale value of your property.
In fact, the price per square foot of your home says a lot. You could usually approximate the price of your home by the square feet.
Buyers don’t just look at the square-feet figure. There are other factors which are not calculated in the overall square-foot of the home. This includes yard space, basements, and garages.
Largely, prospective buyers want to know about the “liveable space.” This includes: How many bedrooms does the property have? How many bathrooms are there?
In fact, an extra bedroom or bathroom can increase the value of your home by up to 20 percent, according to reports. Therefore, it is also worthwhile accounting for the potential of your home to undergo extensions.
4. Newer Almost Always Beats Older
The age and condition of your property can also be an important factor. Sure, homebuyers usually want somewhere in good condition.
The plumbing and electricity ought to work fine. The roof shouldn’t need to be renewed in the next year. The foundations of the building need to be sturdy.
These are the kinds of considerations homebuyers want to know about when they’re browsing the market.
Buyers who are eager to move straight into the property are also willing to pay a top dollar for the privilege. Therefore, if your property “needs work”, you may not be able to get as much money for it.
And yet, if you own a property that is a beautiful old townhouse, for example, the age of the property could make it even more valuable.
5. Recent Renovations can Help
Improvements to your property can help to add value to your home. People want to move quickly into the home. They don’t want outdated problems to handle.
And yet, this depends on your market. For example, the value-added with a swimming pool may be greater in California compared with New Jersey. Check out this resource to discover more about swimming pool remodeling.
6. Trends in the Local Real Estate Market
You may an excellent property in a great location. However, with poor trends in the local market, your home may not be as valuable as you hoped.
For example, if there are currently a lot of sellers with only a few homebuyers, it’s a buyer’s market. This means that your property is likely to be undervalued.
On the other hand, if you’re fortunate, there may be a high number of buyers competing for relatively few homes. This could cause your property price to skyrocket.
7. It’s the Economy, Stupid
The famous phrase, “it’s the economy, stupid” is as true of real estate as it is politics. The wider economy context is always important when you’re looking at the value of your home.
If the economy is currently in a slump, then you’ll struggle to get a decent price for your home. People are reluctant to invest in the housing market when the future isn’t looking bright.
However, if there is an upturn in economic growth, the property market will begin to boom as well. This could put your home at a higher price than you previously imagined.
8. Whatever Interest Rates are Doing
You may be surprised that realize that interest rates can actually have a significant impact on the value of your home.
When short-term interest rates rise, this could cause an increase in the interest on your savings. This would make borrowing money more expensive. Under these circumstances, buyers are less likely to be able to get the money to afford to purchase a house.
Moreover, if long-term interest rates are up, could also impact mortgage repayments. Just when mortgage rates are up, people are not so eager to buy a home.
What Determines the Market Value of Your Home?
Now you know that there are numerous factors which can determine the market value of your home.
Some factors you can influence, such as home improvements. While others are out of your control, such as the success of the economy.
Nonetheless, this can help you decide how to sell your home. If you found this blog post helpful, you share it on social media with your followers!