When you ask a question, you want an answer that’s straight to the point and nothing but the facts. This is especially true for homeowners considering putting their house up for sale. “What is my home worth?” is very likely the single, most commonly asked question to real estate agents. Sellers want to know what to expect from a market, to better understand what their options are going to be, and what their financial situation might be moving forward. Even if you’re not actively thinking about selling your home, understanding the value of what is likely to be your greatest asset or investment makes sound financial sense.
The answer is that a home’s value is always changing, and as the old saying goes, it’s worth what someone is willing to pay for it. This can be generally broken down into two lines of thinking: market conditions (inventory, interest rates, etc.) and what buyers are looking for today.
What adds Value to a home?
On the surface? Size of the plot. Square footage of the home. Location. Age and condition of the home. Add-on structures like garages. These are key characteristics that will help us better understand what a home is worth, and where to start our search in finding the current market value of your home.
When gathering data to determine market value, we use comparable properties to your property which have sold as recently in the last 6 months and within a close proximity to your home Look for homes of a similar size, condition, and in your general area to get an idea. We also look at other features such as the condition of the home. For instance, if the roof needs to be replaced, the value of the cost of replacement may be subtracted from the value of a home.
Understand Which Factors Impact Value
Interest rates do impact the market. The lower the interest rates the more buying power buyers have allowing them to purchase a higher value home. Increasing interest rates could be adding cost for current home buyers, meaning they’re looking for a lower sale price. As property demand increases, or supply decreases, some buyers may be willing to pay more to get a home they really love. Even if you think you know what your home “should” be worth, you can still be surprised to find out how the market is influencing buyers to up or lower their offers.
Desirability of location is another major factor that will influence home value. Good neighborhoods with good schools always add value to a property. Beautiful waterfront property or corner lots are also popular features. Entire neighborhoods can become more desirable, thanks to newly added conveniences like a shopping center or recreational area. These features can be harder to discern a cash value, and again are why we use data from recent sales to help better understand market trends.
Attracting the Right Buyers
Selling a home for top dollar is as much about finding the right listing price, as it is showcasing the home’s best features. Today’s buyer often starts their home search online – therefore, it stands to reason that the marketing of any property starts online and begins with the photos of the property and how it Is marketed online. “A picture is worth a thousand words” holds true in online advertising. Bad listing photos can give buyers the wrong impression- for example, a buyer may think a home looks smaller than it actually is, or doesn’t accurately portray the best features of the home. Listing information needs to be accurate with listing photos that show a well-maintained home. Oftentimes realtors will recommend staging a home to get a higher value. Taking the time to stage a home can often lead to a faster sale date and even a higher sale price. If you can attract the right buyer, you may be able to get even more for your property.
Finding a sweet spot for your home’s asking price isn’t always easy. Price it too far above market value, and you may not get any people coming to look at the home never mind offers to buy. Alternatively, pricing your property too low could mean it sells for lower than what it is worth. Once the recent market activity has been analyzed, together we can make an informed decision as to how to price it so that it will attract the right type of buyers and sell for the highest possible price.