Ever wonder how much your home is worth? How does it compare to the one you are looking to purchase? Many factors go into a home’s value and price tag. Let us dive into the most common factors that influence a home’s value.Verify my mortgage eligibility (May 11th, 2021)
Everyone has different ideas as to the perfect location, but real estate agents take into account three primary indicators for location:
- Quality of local schools
- Proximity to shopping, entertainment, etc.
- Employment opportunities within a reasonable commute.
You as a buyer may care more or less about some of these factors, but each of them affects the amount people are willing to pay for it. Other factors that might come into account are proximity to highways (not too close or too far away), quality of public transit, even how the utility grid is laid out. Location matters almost more than anything.
Size and Usable Space
Yes, square footage is important. Very important, in fact; home prices are generally estimated at price per square foot.Verify my mortgage eligibility (May 11th, 2021)
Usable space is important here. Garages, attics, and unfinished basements don’t count. (Finishing a basement can greatly increase a home’s value). Bedrooms and bathrooms are the most valuable.
There are sometimes local trends in the preferred numbers of bedrooms and bathrooms. One synergy that can shoot a price up is a large number of bedrooms in a neighborhood with good schools.
Age and Condition
To a certain point, newer homes are worth more, because they have newer plumbing, electrical systems, roof, etc. Newer houses are more likely to be move-in ready and less likely to need extensive renovations either at move-in or a few years later.Verify my mortgage eligibility (May 11th, 2021)
Lax maintenance causes a home to deteriorate faster, and dated kitchens and bathrooms can also lower value. The flip side of the coin is that nice old houses in historic districts, that are well-maintained, are often worth more. Landmark status can also increase the value significantly. Some sellers might find updating the kitchen and bathroom a worthwhile investment.
Living Styles and Fashions
The fact that there are fashions in home design that reflect how people live was highlighted recently: The trend towards open-plan homes was abruptly reversed by the coronavirus pandemic and the sudden pivot to working and learning at home. The lower value of open plans is likely to linger.
One reason older homes may sometimes fetch a lower price is that they aren’t designed in a way people want to use the space now.Verify my mortgage eligibility (May 11th, 2021)
The exterior appearance of the house, yard, etc, is generally lumped under “curb appeal.” A home that looks nice from the street will fetch more, even if what’s impacting curb appeal is temporary. You should remove all clutter before taking pictures of your house’s exterior. Take them on an overcast day if possible. Other factors that affect curb appeal include the condition of the roof, visibility of the house numbers, and even whether your car is outside or in the garage. A car parked outside might tell a buyer that there is not enough storage space inside the home.
Supply and Demand
Obviously, a home’s value is also affected by supply and demand. Prices will fluctuate as neighborhoods and areas become more desirable and with the market. There are also seasonal factors. For example, more people tend to move home in the spring, resulting in prices going up temporarily. There is, of course, nothing you can do about this or interest rates.
Other factors that can affect value include the impact of local building codes, renovation potential of a property, and recent upgrades and updates. While it might seem arcane, there is a good reason for the price being suggested and for the likely price you will get or have to pay.
As a buyer, this might affect where you can afford to live and what your budget will get you. To get preapproved for a mortgage so you know exactly how much home you can afford, contact Atlantic Home Mortgage today.