Factors Affecting Home Values - Oro Valley Real Estate
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Curious how much your property is worth? When determining the value of your home, be sure to consider the most important factors: its location, size, comps, finishes, renovations, condition and school zone. These seven features significantly impact the value of your property. Homeowners who are preparing to put their place on the market should also pay special attention to these key factors when pricing their homes. All too often, sellers underestimate or overestimate the value of their home. This massive home pricing mistake either leads to a home selling too quickly (and for not enough money) or to a home not selling at all (or, at least, not for an extended amount of time). To maximize the amount of money you earn on a home – and to sell it without having to make price cuts – consider these factors below when pricing your home.
Ask any Realtor what the most important factor is when it comes to a home’s value, and they’ll likely tell you: “location, location, location.” Your property’s proximity to everything from local amenities to local highways will all dramatically affect the value of your home. Oftentimes, the property’s proximity to a body of water, tourist destinations, city centers and public transportation options also determine how popular a location is for potential buyers. In addition, an area’s crime stats (i.e. the neighborhood’s safety record) may also influence the value of your home. Of course, the city’s housing market – and state of the market, in general – will affect the value of your home. Some housing markets are simply much more expensive than others. For instance, homes in large cities, such as New York City, San Francisco and Boston, cost much more than homes in other parts of the country.
Square feet and yard size
The size of the home (and outdoor space) is an important factor in determining the value of your home. When pricing your home, Realtors will want to assess the number of square feet (particularly “livable” square feet) in a home. The price per square foot is determined by all of the factors listed in this article, as well as the acreage of the lot and the quality of the landscaping. If the home has a dilapidated yard or – at the very least – one with room for improvement, then sellers may want to factor this into their pricing decision.
So how does your property stack up against other homes in the neighborhood? To assess the current value of your home, consider the comps (short for “comparables”). This real estate term refers to properties that have similar characteristics and are, therefore, comparable. To get a good feel for local comps, take a look at recently sold properties in your area that are comparable to your home in features and location. You can use these comps to help price your own home. For instance, if a nearby neighbor sold their house for $500,000, but your home is larger, has more high-end features and is situated in a more coveted location on the street, then you can feel plenty comfortable pricing your home higher than the neighbor’s property. For help assessing nearby comps, we recommend asking a Realtor for guidance.
Even if your taste isn’t for everyone, expensive finishes almost always command a higher listing price. Most buyers will pay up for certain high-end finishes and home upgrades. For instance, is your home outfitted in expensive hardwood floors or inexpensive laminate flooring? Are your kitchen cabinets custom-made or store bought? Other finishes that should be considered when pricing your home include light fixtures, knobs and pulls, kitchen countertops, appliance brands, bathroom finishes and high-tech features.
Have you made any renovations to the home since you purchased it? If so, renovations and upgrades should be considered when determining the value of your home. How much did the renovations cost? Assuming you didn’t over-improve the home, you should be able to include the majority (if not all) of the upgrade expenses into your calculation of the home’s overall value. Of course, some renovations typically yield a greater ROI than others. Several of the most valuable home improvements include a kitchen or bathroom upgrade, an upscale garage door addition, an outdoor deck addition and an energy-efficient window installment. For a look at other valuable home improvements, check here.
Condition of the home
Location and square feet aren’t everything when it comes to the value of your home. Its overall condition is just as important. For instance, a run-down, dilapidated home won’t be worth as much as neighboring properties – even if the home is large and located in highly coveted neighborhood. When calculating the value of your home, be sure to consider the overall condition of the home. Remember: just because a home is old, doesn’t mean it’s worth less. In fact, an aging home that has been well taken care of is oftentimes worth just as much (if not more) than a new build.
Schools can make or break the value of a home – particularly if the home is located in a kid-focused city with an abundance of families. Oftentimes, parents and buyers pay a premium just to be zoned for a certain school. If your home happens to be situated in a neighborhood zoned for excellent public schools and/or private school options, then count yourself lucky. Not sure where the best schools are in your city? Try GreatSchools, a nonprofit organization that rates PK-12 schools in the U.S. based on test scores and other factors.