Home value is always directly dependent on what the buyer is willing to pay for it. However, every single buyer is different. This means that there are so many factors that have to be taken into account when home value is determined. Some are pretty obvious, like the Skrill fees you pay when a transaction is made. Others are not. We will focus on those that are not so likely to be taken into account by people.
Neighborhood Comparable Homes
This is a huge indicator of the value of the home. Just look at the sales prices of some of the similar homes in the neighborhood. Focus on the recent sales. You can also consider home appraisals or data taken from a real estate agent.
In order to find comparable homes, think about:
- Distance to important neighborhood elements
- Feature similarity
There are no 2 comps that are the same so you have to make adjustments when comparing real estate properties from two different neighborhoods. Also, the more you analyze, the easier it is to understand the actual value of the property.
Speaking about location, the home in which you live right now is most likely a perfect one in terms of location since you are close to things that are very important to you, like your job. However, when the appraiser determines property value, a different value might be presented. This is because location varies from one person to the next. The main indicators to analyze when you look at home location are:
- Employment opportunities
- Local school system quality
- Proximity to recreational centers, entertainment centers, and shopping centers
Usable Space And Home Size
As you analyze a real estate property’s market value, you know that you have to think about size. The bigger home can easily increase valuation. However, this is not an easy thing to determine.
You can obviously take a look at square footage. This can easily help you to understand a proper value of the home. The problem is that how much a buyer would pay per one square foot can vary a lot from one person to the next. That is why besides square footage, you should also think about usable space.
As an example, when there is a basement that is not finished, square footage in that area is not really considered. You can, especially when you buy and you think about using that unfinished space in the future.
Condition And Age
It is impossible to accurately determine the value of a property without thinking about its condition and age. Usually, the newer homes have a much higher market appraisal value. This is because many important parts of a home, like the roof, the electrical system, and kitchen appliances are newer. This means that they are going to last for a longer period of time. As a very simple example, in 2019, repairing a roof cost on average £6500. This is money that should be taken into account during appraisals.
Buyers usually pay more for homes that are ready for them to move in quickly. Always take this into account and the other factors mentioned above to properly understand market value for a home.