Know what influences your home’s value?

“My home is so valuable. It’s full of my family, our memories, and our treasures!” 

OK. Yes, that’s a lovely sentiment and it’s true for most of us. It’s not something the bank looks for, however, nor will it pay the mortgage or entice buyers. 

So, what DOES influence a home’s value? The answer is more complicated than you might think, and can change with the times. 

Location. Location. And yes, location.

There’s a reason it’s a cliché. It’s just a fact. Where your home is located is a huge factor in determining what it’s worth. If you take carbon copies of the same house, plunk one down in a neighborhood with easy access to the highway, public transportation and shopping, while situating the other on the corner of a busy throughway with no nearby commerce, which is worth more? Bingo! The former will sell for more simply because it’s surrounded by the things most people want.  

Before you write off—or buy into—any location, however, it’s important to remember that areas do change and as that happens, the value of the properties there can change, too. For example, once-rundown section of a city that now draws eclectic restaurants and spunky breweries will see property values trending up, while a small town once filled with idyllic homes that loses its major employer will likely see values plummeting. In both cases, the locations themselves have remained the same; but the surroundings and circumstances changed.

Comps. Formally known as Comparables.

Have you ever shopped for something on eBay and found listings where the price is sky high? If you have a similar item to sell, you’re thinking: “Score! I am in the money!” But then, common sense pipes up, you check the ‘Actual Price Paid’ listings, and are disappointed to find no one paid that high price and the item sold for something much more reasonable.

That’s the free market for you. Goods—and homes—are only worth what people are willing to pay for them. So, when it’s time to list your home, it’s vital to look at the actual selling prices of houses like yours in your area. To be most accurate, these sales must be as recent as possible. That’s what we mean by a “comp.” 

Comps take into account updates and upgrades to the home, proximity to schools, square footage and so much more. Thankfully, computers handle most of the actual data analysis for comps these days, so your realtor should be able to hook you up.

It’s all about the space (‘Bout the space, no treble)

We all like a little space. Some wiggle room, if you will. When it comes to home value, more space is usually correlated with a place being worth more money, but it’s not just ANY space. It must be usable space. So, if you’re listing your home as 4,000 square feet, but 500 of that is an attic and another 700 is a garage, you’re down to 2,800 square feet of actual, usable space. (Unfinished basements are also not considered usable space, so be aware of this when you’re listing your home.) Your buyers certainly will be. 

Supply and demand 

That economy class is coming in handy, isn’t it? (What’s that? You slept through Econ 101?)

Well, no matter, this is an easy one. When there aren’t enough homes on the market for the many buyers who are searching—as has happened in some areas of the country during the pandemic—prices go up. 

Fewer homes (low supply) + a glut of buyers (high demand) = Soaring prices

That’s great news if you’re a seller and painful news if you’re a buyer. Still, it’s not forever. As time passes and buyers look elsewhere or builders build more homes, supply and demand tend to come more in line and prices stabilize. 

Did you keep up on the upkeep?

Home ownership is expensive. It’s pricey from the start and frankly, it doesn’t get better. From everyday maintenance on the temperature control systems to once-in-awhile major purchases like a new roof, maintaining a home takes work. When it’s time to sell, though, the work is (generally) worth it. Your home will fetch a higher selling price if your heating and air conditioning have been well-maintained (and yes, replaced when needed), the roof is in good shape and the flooring is clean and undamaged, just to mention a few big ticket items. Even minor maintenance items, if ignored, can add up to big money lost. So stay on top of things, K? Your home is your castle. Or maybe not your castle, but it is your happy place. (Maybe that’s more of a bouncy castle?) Regardless, being aware of the aspects that make it more valuable for resale might make you appreciate it even more now. (And remember: Don’t forget to change the furnace filter!)   

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