Whether you're looking to buy or sell a home, the most important factor you will need to consider is value: what is this home worth?
If you're putting your home on the market, it's important to understand what factors contribute to the value of your home; this then enables you to make improvements to increase its value, if you choose. As a buyer, it's just as important to understand what factors affect the home price so you whether you're getting a good deal. Here are some basic things to keep in mind:
When it comes to home value, 3 of the most important factors are location, product, and timing.
Location, location, location...
You know the mantra. Location is often touted as the pinnacle factor in home value. Why? Because your location can automatically add--or detract--home value.
Everybody wants the right home in the right neighborhood. Is the home in a particularly desirable neighborhood? Further, is it in a desirable location within the good neighborhood? Two identical houses in the same neighborhood can have vastly different prices if one is on a quiet street and the other backs up to a busy highway or intersection. If you have a beautiful house in a less favorable neighborhood, that will also affect the value. Conversely, a house in an up and coming neighborhood is likely to be valued higher and may continue to increase in value.
Houses are products.
Houses are kind of like used cars: many factors determine their value, including age, appearance, maintenance, and history.
Houses on either end of the age spectrum are easily in demand. Old properties with "charm" or new properties that require no maintenance or updates. It's the in-betweeners that can be difficult to move. A 40-year-old house is particularly difficult to sell, for example, if it's outdated.
Seller-added value can help counterbalance a house's age. Having in-demand features is a plus, and even something as simple as fresh, neutral paint and flowers can make the home much more attractive, and thereby more valuable. Keep up with maintenance and home repairs to avoid having to pay a premium to get everything fixed later. Maintenance should extend beyond the interior and include things like landscaping, too--increasing curb appeal can make your house the nicest in the neighborhood, and therefore a more valuable asset.
Negative history can negatively influence home value. If the home has been involved with damage or mold due to flooding, a fire on or near the property, or is associated with any kind of crime, buyers might be less willing to inherit such baggage--even if the info is outdated.
Timing Is Everything
Timing can be a tricky factor to work around, especially when selling (especially when you're trying to sell quickly). Listing your house when a lot of other houses are for sale in your neighborhood isn't favorable. Think of the law of supply and demand: low supply equals greater demand.
Note: the last word on a home's value comes from a professional realtor.
An experienced realtor will perform a physical inspection and determine the condition of the home. A realtor also considers the neighborhood and the prices of recently sold homes to narrow down value.
Check out our tips for simple ways to increase your home's value on a budget here.
