All homeowners are aware of what they paid for their property, however, this value can change over time. It is important to know what the current value of a property is. The value of every house can vary, as it is dependent on several different factors. This can include the following:
A good indicator of the value of your home can be the sale prices of homes similar to yours in the neighborhood that were recently sold. This is often referred to as “comps.” Comps can be found in your neighborhood based on how recent they were sold, similar features to your home, the distance it is from your home, and its location.
The Location of the Home
People buy a home based on what is convenient for them. This may mean its proximity to work, school, family, etc. However, when appraisers determine the value of a home, they look into primary indicators based on the location of the home. This includes:
- The quality of local schools
- Employment opportunities
- Proximity to shopping, entertainment, and recreational centers
In addition to this, the distance a house is from highways, utility lines, and public transportation can affect the value of a home.
One of the more obvious factors when estimating a home’s value is its size. A house’s value is roughly estimated in price per square foot. In addition to this, usable space is a determining factor as well. A garage, attic, or unfinished basement is usually not considered in usable square footage. Livable spaces such as bedrooms and bathrooms are more highly valued. The more usable space there is in a home, the more the home is usually worth.
Age and Condition
Newer homes are usually appraised at a higher value. The home’s condition also plays into its value. Important parts of a house that are less likely to break down can lead to savings for a buyer. This is why inspections generally take place before a buy.
Any upgrades or updates that are made to a home can improve its value, especially if they are outdated. This can include adding extensions, pools, wood floors, remodels, etc.
The Local Market
The number of properties that are for sale in the area of the home can impact home value, as there are many buyers competing for fewer homes. Prices may need to be adjusted to attract more offers.
Supply vs. demand can be a large factor in the value of a home. The economy can often impact a person’s ability to buy or sell a home. In slower economic conditions, the housing market can struggle. This is why it is important to keep up with current home sales and price appreciation in your area.
Short-term and long-term interest rates can influence a person’s ability to afford a home. As interest rates rise, fewer people may be able to buy a home, thus affecting how much a home can be sold for.
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