The value of your home is dictated by what willing buyers find interesting, helpful, or valuable. Every buyer is different, though. For example, a family might weigh the value of a house based on location factors such as their jobs and schools around them. Another might weigh the value basing it on the size and number of rooms in it.
Selling a house can be a stressful experience, from choosing the right estate agent, to the main event of moving day itself. If you’re thinking about selling, or have got a valuation you’re not happy there are some of the key factors that will greatly influence the value of your house.
So here are our top 8 factors that influence the value of your house.
1. Neighbourhood comps
“Comps” simply means the comparable homes in your neighbourhood. These are the houses that you can equate their value to yours. The sale prices of similar homes in your neighborhood sold recently are clear and by far the best indication of the value of your home.
If you want to find comps, you can look for homes that have recently been sold or look for a home that has the same placement as yours, for example near a golf course or a busy street.
Now no two houses are the same so you prices won’t be exactly the same, but as a rough guide if your neighbor’s house is similar to yours and is selling for $350,000 chances are yours will be around that as well.
2. The usable space and size of the house
The size of your house is a very important element to measure its market value. A bigger house can have a positive impact on its valuation. Roughly, the house prices can be estimated by multiplying the total size of the house with the value per square foot.
Usable spaces of a house also influence and determine the value. They include garages, basements, and attics. However, it’s livable spaces that blows the minds potential buyers and can entice they to make an offer. Bedrooms and bathrooms have the biggest impact here. This means that the more beds and baths your house has, the potential higher value it will have. This also means that you can increase the value of your house by renovating these rooms and ensuring that they are in the best condition ever.
3. The location
Where is your house located? What’s close by? These are some of the things any potential acquirer will be thinking about. At the moment, you might picture your house as perfect since it is near your parents’ house or your job, but that probably won’t be true for people thinking about making an offer. They will be looking for:
– The proximity to local schools and their quality
– The proximity to recreation centers, highways, and shopping centers.
– Availability of employment opportunities
The further away your house it to each of the above things, the more that will have a negative effect on its value. While calculating the value, the location is more important than the size of the house.
4. Updates and upgrades
These are mainly done to increase the value to your house. Most of the time this is done to older houses that have outdated features and really need it. However certain renovations or upgrades carry more weight than others.
How the upgrade impacts your house varies and depends on the market that you are exposed to. You might find that a finished basement in one town is more valuable than a finished basement in another town. So if you’re thinking about spending time and money on something it might be worth checking with local estate agents about what features potential buyers are looking for in your area.
To improve your property value, even more, you can decide to add other projects such as wooden floors or even a swimming pool. You can also remodel your kitchen and add a full bathroom, both of which will help increase the value of your house. You’ll also be making it much more appealing to potential buyers.
5. Condition and age
Newer homes typically have a higher value. This can be simply explained by the fact that critical parts of this house (such as electrical, plumbing, and roofing) are newer and therefore less likely to break or need work in the future. This guarantees the buyer to generate some savings. For example, a roof having a twenty years warranty will give the buyer two decades peace of mind they shouldn’t have to spend any money on the roof. On the other side an old house might require replacement in a few months or years.
A move-in ready house is what captures the attention of many buyers, especially those buying their new first home. They will be ready to pay top dollar for such a house. Therefore, cleaning up the house and repairing faulty objects in it will increase the value or your property.
6. The local market
You might be selling a house that is in great condition, situated in the nicest of places, or have all the best upgrades, but the number of buyers in the area, as well as the number of other houses on sale in your area, will affect your home’s value.
A lot of buyers storming one area competing for the fewer number of houses will put you at an advantage. On the other hand, fewer buyers might be in a market that has many homes. This definitely means that the house value will decrease since it is the buyers’ market.
The market condition can also impact on the value of your home. Homes tend to sell better and quickly in a seller’s market.
7. Economic indicators
This mainly focuses on the larger economy which often affects the housing market. When the economy is experiencing slower conditions, you will struggle to sell and get a good valuation. So it’s important when considering selling your house to keep up with current affairs. Especially the status of home sales and their prices. This will help you evaluate the best time to sell your house, you may decide to wait a couple of more years.
Final thoughts
As you can see there are a lot of different factors you need to be mindful of. Not only influencing the value of your house, but if you should even be selling it at all. Taking into account all the above you should be able to avoid common mistakes when selling your house and ensure you get the best price in the best market conditions possible.
