Home values fluctuate based on many different factors. Some of these include location, age, condition, size, and even the number of bedrooms. In order to determine how much a home will sell for, you mu
st understand exactly why it sells for what it does. This includes knowing what influences its value. I've compiled a list of the top 10 most important factors that influence a home's value. Some of these factors are: Location, Condition, Size, Age, Number of Bedrooms, Yard/Lot Size, and School District. If you're looking to sell your home, then you should learn about each of these factors before making any decisions.
Summary
Location, size, and usable space all play a role in determining how much a home will cost.
Homeowners should keep track of the number of homes available for purchase versus those that are currently selling.
Rising interest rates can decrease home values while falling interest rates can increase home values.
Your Location Matters
Homes near amenities like grocery stores, schools, parks, or close to the city are considered to be desirable locations. That’s why the most important thing to consider when buying real estate is location, location, location. If you live in a city where prices are high, it may not matter what kind of house you buy. But if you live in a small town or rural area, you should look at houses that are close to services and amenities.
Home Size and Usable Space
The first thing you need to know is how much money you want to spend on a house. If you plan to live in the home for 10 years or less, you might find that buying a smaller home saves you money over the long term. For example, let’s say you buy a $200,000 home today and pay $1,500 per month including property taxes. Over 10 years, you will save $14,400 in property tax payments. In addition, you will likely see a return on your initial down payment and closing cost because you will probably sell the home for more than what you paid for it.
If you've saved up for a long time, you might be able to afford a larger house. However, you should still consider what kind of neighborhood you would like to live in. For instance, would you like to live in a neighborhood with amenities, HOA association, or something with no amenities that may offer larger lot sizes, you have many choices.
The Housing Inventory Levels
Homeowners should pay attention to the number of homes listed for sale versus the number of homes sold over the next few months. If inventory levels are low, it could mean that homeowners are getting more offers than they expected. In turn, the home may sell at a higher price. On the flip side, if inventory levels are high, it could mean that there are fewer people looking to buy houses right now. Homeowners who don't sell at the right time end up losing money because they'll have to drop their price to attract buyers. The best way to determine whether inventory levels are too high or too low is to research your local housing market, reaching out to your local realtor.
The Rise and Fall of Mortgage Interest Rates
Interest rates affect home values in two different ways. First, interest rates directly impact mortgage payments, which in turn affect monthly housing costs. Second, rising interest rates can lead to decreased demand for houses, which will lower the prices.
To understand how interest rates affect home values, let's look at both sides of the equation. When interest rates rise, homeowners pay more money each month toward their mortgages.
As the economy strengthens, more people buy homes, which increases the price of existing homes. Conversely, falling interest rates can lead to more consumer buying power, which also increases the consumer purchasing of homes. Falling interest rates can also lead to increased demand for homes, which pushes up house prices.
So while low-interest rates can drive up home values, high-interest rates can decrease them. But remember that interest rates are going to change every day. So if you plan to sell your home within six months, you might want to consider selling now instead of waiting until interest rates increase again.
Age And Condition of Your Home
It's important to consider whether you'd prefer to invest in renovations or repairs before selling your home. Renovations can add thousands of dollars to the sale price, but they can also significantly increase the resale value of your property. Repairs, on the other hand, usually cost much less money but can still boost the value of your home.
Home improvements and repairs aren't just limited to interior spaces. Landscaping is another area where you can save money but gain more on your home's value. Adding a patio or deck can provide additional living space, and landscaping can also attract potential buyers. Of course, you don't always have to renovate or repair your home. Sometimes, the best option is to simply maintain it. Maintaining a home can be cheaper than making extensive upgrades, and it can also extend the life of your house.
For example, you could paint your exterior walls every few years instead of repainting them every five years. Or you could replace your roof every 10 years rather than every 20 years. These types of minor fixes can add hundreds of dollars to the value of your home, and they can also prevent costly problems down the road.
Renovation on Renovation
Kitchen and bathroom upgrades are one of the most popular renovations in the United States. A study by Houzz found that about half of homeowners plan to do some type of renovation within the next five years. Kitchen remodels cost an average of $35000, while bathroom renovations run around $5,000 this is depending on the size and finishes.
Even though renovating doesn't necessarily mean you're selling your home. In fact, it could actually increase the value of your property. "Adding rooms to your home increases value," says Nicole Artis - Broker and Owner of Modern Move Agency.
Renovations can be expensive, especially if you don't plan ahead. But if you're thinking about renovating your kitchen, bathroom, or any room in your house, here are three things you should think about first.
1. How Much Will It Cost?
Before you start spending money on renovations, you need to determine how much it will cost. This means calculating the total amount you want to spend on the project, plus an estimate of the materials needed. It's important to remember that renovations aren't cheap, so you may need to save up for several years before you can afford the project.
2. What Do I Need To Know Before Starting?
There are a number of factors that affect the price of a renovation. For example, the size of the space you're working on, whether you're going to add on to the existing structure, and the quality of the materials used. These factors can vary depending on the type of renovation you're considering. If you're thinking about adding on to an existing building, you'll need to factor in the costs associated with construction.
3. Where Can I Find Help?
If you're thinking about renovating your kitchen, bathroom, basement, or any other part of your home, you'll probably need professional advice. There are plenty of companies that offer services such as plumbing, electrical, and carpentry. Some of these companies specialize in certain areas, such as kitchens, bathrooms, or basements. Others provide general contracting services.
But before choosing a company, ask yourself questions like:
Does the company have a reputation for providing excellent service?
How experienced are the workers?
How much does the company charge per hour?
How long has the company been in business?
How often does the company perform similar projects?
How much will the company charge me for my job?
How long will the project take?
Who will supervise the project?
How quickly can the company complete the project?
What happens if something goes wrong?
What guarantees does the company give?
What insurance coverage does the company offer?
What tools and equipment will the company supply?
How much experience does the company have performing similar jobs?
What types of warranties does the company offer?
Local Market: What's Available? Buyer's Markets - When there are lots of houses for sale, buyers can find properties quickly and easily, making it easier to buy a home. This is called a "buyer's market." On the flip side, sellers' markets occur when fewer homes are listed for sale, which makes it harder for potential buyers to find what they want. In those cases, sellers may have to lower prices to attract buyers. Seller's Market - If you're selling your home, you'll likely see more offers on your property during a seller's market. This means you stand to make more money because more people are competing for your listing. Foreclosures or Short Sales in The Neighborhood Though the majority of these losses are incurred by the owners of foreclosure homes themselves, they're not the only ones who suffer. A 2013 report by the Alliance for a Just Society (AJS), a grassroots coalition focused on equal rights, found an increase in local property taxes in areas where foreclosures were prevalent, along with a significant decrease in the value of neighboring homes. According to RealtyTrac data, neighboring home values dropped an average of 1% for each 7% the foreclosed home value fell. The average decline in the property value of a foreclosure is anywhere between 22 to 28 percent, depending on how much equity was lost during the foreclosure process. With a 28 percent loss on a foreclosed home, neighbors can expect a 4 percent drop in property values around them depending on the condition of the foreclosed properties. Schools A recent study found that homes within one mile of a school would sell for $6,900 more than those that are not. This proves that convenience is an important factor when purchasing a home. How the Appraised Value Can Affect the Sale of a Home In many cases, however, the appraisal process goes awry. The appraiser determines the value of the house to be the same or even lower than the sales price, and the buyer backs out of the deal. Both parties are unhappy. Though the appraisal process may not be straightforward, it does not necessarily mean that the home is worth less than what was paid. In fact, if the appraisal shows that the property is worth more than the sales price, then the lender will lend the buyer enough to purchase the home. In the event of a low appraisal, the buyer can ask the seller if he or she would be willing to reduce the asking price of the property so that it matches the appraised value. If the seller refuses, then the deal may fall apart. An undervalued house might indicate that the owner doesn’t care about selling his or her home. However, sometimes the buyer may be willing to pay the difference between the contract price and the appraised value. For Example: If the buyer's contract is for $200,000 and the appraisal comes in at $190,000 the buyer could pay the $10,000 difference to make the sale price $200,000. In conclusion, the factors listed above are all very important when it comes to determining the value of your home. Even though there are several other aspects that influence the overall price of your property that isn't included here. For example, the condition of your roof, the size of your yard, and the number of bedrooms and bathrooms are all additional factors that can affect the final sale price. As such, it's important to keep these points in mind when trying to determine the right list price for your house. In fact, if you want to sell quickly, you might want to look into hiring a real estate agent who specializes in helping homeowners like you sell their homes fast. At Modern Move Agency they know exactly how to advise potential buyers, and they have access to resources that you won't have. So if you really want to get your home sold quickly, contact us today! Sell
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