FEB 9, 2023
The value of your home might be based on a few different things, but ultimately it's determined by the market price that a willing buyer is able to pay for it. The nuances stem from understanding that every buyer is going to be different: some may prioritize school district over everything, and other buyers might only want a house with a pool and are willing to pay top dollar.
Below are the most common factors that come in to play when buyers gauge the value of your home:
This goes without saying as it's a cliche term in real estate by now, but the location of your home greatly impacts its value. Remember, you can't remodel out of a bad neighborhood. Your home's location determines:
New & seasoned buyers in any market will factor in all of these things before making a decision to purchase a house, and it's the same reason why a home might be steeply priced vs. another option just a mile away.
A lot of homeowners misunderstand the role that the age & condition of their home play in the bottom line valuation of the property. It's easy to understand why a new construction home may fetch much more than a home built decades ago, since buyers will always favor a move-in ready home. However, sellers need to know that the condition of major appliances and parts of the home (roof, hot water tank, boiler, etc.) also come in to play.
For example, if your home isn't a new construction but the roof has a 25 year warranty — that's seen favorably with a lot of homebuyers as that's one less thing for them to be worried about.
Interest rates, unemployment numbers, or an impending world war can all affect the overall market sentiment of the industry. During economic recessions or depressions, there aren't a whole lot of buyers actively looking to spend money and so the value of your home will drop because the demand isn't there. You could have the newest house in the best neighborhood, but if a buyer isn't willing to make an offer — you won't be able to sell your home.
This content is meant for informational purposes only and is not intended to be construed as financial, tax, legal, or insurance advice.
