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Five Factors that Influence Home Value

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Before you can sell, you have to understand what it’s home value. This number is determined by numerous factors, but there are some more important than others. A homeowner when selling their home is always looking for what will increase the value of their home for sale, and what can they personally do to increase the value to receive more money from potential buyers. When deciding a home’s value there are many factors to consider. There are always the basics such as when was the home built, has it recently been renovated, etc. But then there are also the nitty-gritty questions such as is the home’s location in a good neighborhood, what are the school systems like, and what would be the resale value on this particular home. The home’s value is always determined by what a potential buyer is willing to pay. Some buyers may weigh certain qualities of the home over others and think the value of the home is worth more than other potential buyers. But here are five sure factors that influence a home’s value and what you as the homeowner can do to increase the value. The History of the Home’s Sale Price and the Neighborhood’s Housing Prices

The History of the Home’s Sale Price and the Neighborhood’s Housing Prices

The first thing anyone involved with the sale of the home, appraisers, or even potentially interested home buyers will look at is the history of the home’s sale price. How much did the home sell for even time it was sold and if the price increased or decreased each time the home was sold. This in a way will give interested parties an idea about any renovations done to the home and when those might have occurred because of the price increase. If the price has decreased however, this will let interested parties know that something has gone awry with the home. There are other external forces that can cause a home’s selling price to decrease but one of the more common situations is that the home is not being cared for or updated as needed so of course, the home will not be in as good of condition as it was the last time it sold for a higher price. You may think that the sale price history of your home, especially before you owned it, would not affect much, but any part of the history of a home tells a story.

The homeowner also needs to research comparable homes in the neighborhood where their home is located. These comparable homes are referred to as ‘comps’ and it is what most real estate experts will use to determine the value of a home. When selling your home be sure to research comps personally to see what other homes in your neighborhood are going for and how much you could market your home for. Of course, other homes are not your home and they could be in better or worse condition, so an appraisal is still needed to determine the true value of your home. 

Location and Near By Features

Location is everything whenever it comes to home buying. The location will determine how many potential buyers a home has. A potential home buyer can walk into a home and dislike almost everything about it and love the location, and likely still purchase it. You can change almost everything about a home, except for the location. That is one feature of a home that you are stuck with which is why having a home in a good location instantly adds value to the home and an amazing marketing strategy.

Nearby features also add value to the home due to potential buyers wanting to be in a location suited for them and their personal lifestyle. Some key features that add value to the home due to the location are; good school systems, proximity to job opportunities, and being near restaurants and entertainment.  Many people think that the majority of homes sold have to be in the city near everything but that is not defiantly the truth. A home outside of city limits can sell just as easily as one in the city. It is all dependent on what the potential home buyer is looking for and many people enjoy the quietness outside the city and do not mind the commute to get it. One person’s definition of value is not everyone’s and there is always a buyer who will think your home is their dream home.

Home Size = Home Value

It is common knowledge that the bigger the home, the larger the price. Square footage adds value to your home instantly. Some people opt to add an outdoor deck or patio for entertainment space to add value to the home because it counts towards the square footage number in the listing and adds another useful room for entertaining guests. Home size is also important for added resale value. Resale value is usually on the potential home buyer’s mind when looking at homes because why buy something that will not easily retain its value with a little upkeep? This is why the square foot measurement of a home is important to potential home buyers. The value retention alone is enough to make them only interested in homes with certain square footage and above. There is also a difference between usable/livable space and unusable space. Usually, only livable square footage is counted whenever the home is appraised. This means if your home has an unfinished attic, unfinished basement, and a garage; none of these are counted as livable space. So, if the home in total is 4,000 square feet and the livable space is only 3,000 of that, the home may be considered only 3,000 square feet because the other 1,000 square feet is unusable. While these additions usually add value to the home in terms of having storage space or the opportunity to make these spaces livable, they will sadly not count towards the square footage of the home.

Age,Condition, Upgrades, and Updates

Like anything in life, time will wear down a home. A home that used to be all shiny and new will age and tarnish over time. It is inevitable that a home will age, but there are things that the homeowner can do to prevent the condition of the home from severely declining. An older home can still be in great condition, and older homes still in peak conditions can also be marketed for more money due to historical value. Age does not necessarily mean bad condition, it all depends on the upgrades and upkeep that it maintained on the home. Another quality that will continuously add value to the home is updating it and keeping it modern. No potential home buyer wants to walk into a dated kitchen or living room, so if you are looking to receive as much value as possible for your home, renovations are a necessity. The homeowner can choose to not renovate or update the home but then the home will be marketed as for sale as is, which means the homeowner will lose money because they will have to take into consideration the renovations that the interested home buyer will have to do. The homeowner will not be able to price the home as move-in ready which can be priced higher than a for sale as-is home. This is why repairs and renovations are so important for the value of the home.

The Housing Market

This is something well out of the homeowner’s control, yet it still does affect the value of the home. You cannot sell a home easily if the housing market is down or the economy is in a recession. No one usually has the money for a home or for a mortgage loan so not many houses are selling. One marketing strategy is to lower the price of the home every so often if it has been sitting stagnate on the market for a while in order to attract potential buyers. This, through no fault of the homeowner’s, does decrease the value of the home because a home’s value is only what a buyer is willing to pay for it. This is something that was devastating for many homeowners during the housing market crisis a few years ago, and I am positive several homes did not sell for what they were worth because of it. 

There are also many simple ways to add value to your home if you are pressed for time or money. Simple renovations such as giving the walls a fresh coat of paint or sprucing up the landscaping of the home can add value or at the very least bring in potential buyers. One of the most important things when selling your home is bringing a potential buyer’s attention to the home, which is why marketing your home is also important. Marketing your home will not necessarily bring value to the home, but it will make it known your home is for sale and hopefully bring in the future owners of the home you are attempting to sell. With all of these tips and tricks, hopefully, the home selling process is smooth sailing for the homeowner and will help elevate some of the guesswork on how the value of their home is calculated.

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