Posted by: Regent Homes, on February 16, 2016
Thinking of buying or building a new home? That’s great! Do you have an existing home you need to sell first? If so, you have come to the right place. Here, we are going to cover the basics on Home Market Value and how your home’s value is determined.
There are several important aspects that go into determining home market value. Some of these things are upgrades and repairs you can complete in your home. We are going to help you focus on some of the most important aspects so that you can increase the market value of your home and get the most out of it!
What is Market Value and How is it Determined?
When talking about a home’s market value, it simply means the price at which the home will sell within a reasonable time period in its current condition. In this case, a reasonable time period is considered 30-90 days. Real Estate appraisers are usually the ones who will make appraisals of a home’s market value. They base the value off of three key elements:
- The neighborhood/ area of the home – it is important for your Real Estate agent to remember that they are estimating the market value of one particular home. The location and neighborhood is the starting point for the appraisal. If the location were moved to a higher-end neighborhood, it could likely increase the value of the home just by location. For this reason, they can only use very similar homes in the area for comparison.
- The current condition of the house – Most home-buyers are looking for the home that has the best curb appeal with the least amount of work. The current condition of the home will determine the number of buyers who are interested and how long it will stay on the market.
- The amount of time it takes to sell – In a typical real estate market, a house can usually sell within one to three months. If it does not sell, the problem is simple: the home is priced too high. On the other hand, if it sells too quickly, it may be a sign that it had been priced too low.
Outside of these three factors, there are a few other things that will make a home more valuable to a real estate appraiser. These elements will usually increase the value of the home, which in turn, is great for the seller.
- Amenities – Does the house have a fenced in backyard or a pool? Maybe it has an awesome bonus room or a mother-in-law suite?
- Size of the home – Does it have a lot of bedrooms? Are the rooms large in size?
- Age of the home – Is the home newer or older construction? Depending on the age of the home, it can make it easier to find other comparable homes in the area.
How Can You Increase Your Home’s Market Value?
Doing some renovations and updates to your home can really make a difference when it comes to selling it within a reasonable time. As we previously mentioned, almost all home-buyers are looking for a home that has great curb appeal. We are going to list a few great ways you can increase the market value of your home.
- Prune and Landscape your yard – This is the first thing people notice when house hunting. If your trees are overgrown and your flowerbeds are in need of some TLC, it may be a good idea to start there! Plant some flowers, trim the bushes, and pull the weeds. You will be amazed at how much a little gardening makeover can transform your home.
- Update the lighting in your home – Lighting trends change every few years, so it is important to stay up-to-date on the newest trends. Consider adding dimming switches to your lights or installing a new, updated chandelier in your foyer area. Do not forget about the outdoor lighting as well, such as porch and patio lights.
- Tend to your basic home maintenance – As much as you want to update the cabinets in the kitchen, tend to the bigger, “behind-the-scenes” work first. Make sure there are no leaky pipes, check the gutters, and inspect the furnace. For many home-buyers, these are usually bigger “deal-breakers” than the style of cabinetry in the kitchen.
- Update the flooring – This is one that does not require a huge investment, but the return is much greater! There is nothing better than new looking carpets or floors. Flooring takes such a beating, and most home-buyers usually update that the moment they move in to a new home. If this is already done, it eliminates one thing they have to do!
How Does Each Area of My Home Affect the Value?
As you can see, there are several different areas of a home that affect its value. Whether it is the size or the location of the home, it all plays a contributing role into how your home will be appraised. If you have a home that is much older and the surrounding homes are newer, your home value will likely be lower due to its age. If you have one bathroom in your house, a family with three kids might not see the value in your home. On the other hand, a couple with no kids might find it to be the perfect home for them! It is important to remember that you can still add value in other areas and get the most out of the home with updates, renovations and even small additions.
Understanding all of the factors that go into determining the market value of a home will help you when it comes time to sell. If an appraiser can find a comparable home in your area that is around the same size (bedrooms, bathrooms, etc.) it makes it easier to determine the resale value of your home. When the condition of the home is good, it is likely that you will be able to determine an accurate estimate of your home’s value.
Being able to give an accurate estimate of a home’s market value will make it easier to sell; therefore benefiting you as the homeowner. When you are ready to upgrade to a new home, give us a call! We would love to help!
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