Planning on selling your home? Then you’ve probably already spoken to a real estate agent about your home’s value. Curious about how they landed on that number? It’s not just a hunch or a guess. A REALTOR’S® estimate is based on real factors that have known impacts on a property’s value. We’ll let you in on eight of those factors right here, beginning with:
1. The Neighborhood
Your neighborhood plays one of the biggest roles in determining your home’s value. This doesn’t mean the area has to be a perfectly-manicured “Stepford” community in order to add value to your home. Instead, home buyers are more interested in neighborhoods that offer easy access to schools, restaurants, stores, and job opportunities. If your neighborhood is rocking these amenities, there’s a good chance it will be positively reflected in the value of your home.
The next big factor in determining the sale price is the size of the house. Common logic dictates: The bigger your house, the more it will be worth. However, square footage isn’t the be-all-end-all when it comes to home valuation. Buyers are also concerned with the number of bedrooms, the number of bathrooms, and whether the house has any other usable space such as a garage, loft or office.
Put simply: the better the condition of your house, the more desirable it is to the market. You could have a new, but poorly maintained house that will be worth less than a slightly older, but better maintained, living space. The takeaway: if you are planning to sell your house soon, it’s smart to carry out some minor renovation work ahead of time.
4. Recent Improvements
This one is a no-brainer. Buyers love upgrades. These upgrades can be a major expense, if not a major headache if the buyer has to do them after closing. According to the National Associations of REALTORS®, a recent kitchen or bathroom renovation takes the pressure off the buyer and will go a long way toward increasing home-value. But it doesn’t just apply to whole rooms. Other updates, like a new roof, windows, or even a new garage-door can give your home’s value a boost. However, not all renovations are created equal. In fact, some don’t return as much as they cost, according to Remodeling Magazine’s 2019 Cost Versus Value Report. Do your homework and reach out to your GO Realty agent if you have questions on what a particular renovation will do to your home’s value.
5. Curb Appeal
If you take pride in your lawn, then it will likely show to buyers and appraisers. How a home looks from the street is a major contributing factor to its value. Buyers are looking for clean, attractive front yards and home-exteriors. So, get outside and clean up those beds, edge the driveway and sidewalks, and don’t hesitate to lay down some new trees, shrubs, or flowers.
6. Condition of Systems & Appliances
Your home’s value is quite literally the sum of its parts, and those parts include the appliances and built-in systems. The age and conditions of these things can really swing home values in either direction. If the A/C, water-heater, fridge or oven are in bad shape, you’ll see it reflected in your home’s value. If they’ve been well taken care of, or even replaced recently, it’ll make a big difference in valuation.
7. The Economy
Quite often, the value of property closely follows the state of the current economy. When jobs and salaries are booming, buyers have more money to purchase homes with, so property values rise as a result. When the economy takes a turn for the worse, buyers have less money to spend and values will begin to decrease. A home valuation takes in to account both the broad, national economy as well as the local one. The value and sale price of other homes in your neighborhood will play a big role in your home’s value.
8. Interest Rates
Ah, interest rates. Most of us don’t think about how these rates can affect things like our home’s value but, trust us, they do. Increased short-term interest rates affect the amount of interest gained by a savings account, but also may increase the expense of using credit cards. This impacts how much money buyers have available to put toward a home purchase, which affects demand and, therefore, home values. When long-term rates, like mortgage rates, go down, borrowers will pay less in interest payments over time. This greatly influences buyer attitudes, which – you guessed it – affects values.
Though it can sometimes seem like property valuations are just made up or simply pulled out of thin air, this is definitely not the case. Home valuations are arrived at through complex calculations that include factors such as the eight mentioned above. By pricing your house with these factors in mind – or by taking steps to improve upon those within your control – you’ll make your home more appealing to buyers and less stressful for you as you look to move on to the next chapter in your life’s story.