5 Things to Consider About Property Value
By Elena Johnson
What is your property really worth today? We can help you figure it out by considering some of these influences.
When did you purchase the property?
Depending on when you purchased your property, you may have been on a crest of financial circumstances or you may have been in a ditch. For example, if you bought a property in the midst of the 2008 recession and its wake, the property you purchased was most likely sold for a lower amount than what it would now. On the other hand, if you purchased when the market was flowing and growing, your house may be of equal or lesser value now. It’s important to do your research on how the market in your area has changed since your original purchase.
How well have you maintained/improved the property during your ownership?
While this may seem like an obvious thing to consider when evaluating your property worth, it shouldn’t be downplayed. Preventative maintenance does much more for a property value than simply keep it from decreasing—if you have kept up the care for your home, you have prevented aging and depreciation. The literal age of your house hasn’t changed, of course, but the effective age has been kept younger and more usable (read: higher value) than a house whose shutters have warped because they weren’t painted and protected regularly. That house will ultimately need replacements rather than repairs.
Improvements to properties speak for themselves. If yours and the neighbor’s house were exactly the same when they both were built, but you have since added a fully updated master suite or a backyard deck and they haven’t, your improvements have increased the value of your house. Make sure to do some research first into what improvements are really worth it before diving into a project that may not have a high return on investment!
How similar is your home to the surrounding homes in the area?
Neighborhood will have an effect on the worth of your home. In general, homogeneity within a neighborhood is considered a good thing; when all homes in an area are well maintained, the collective worth goes up. If someone on your block were to paint their house bright pink, for example, and you’re in a neighborhood of brick houses, the shock of the mismatched home can negatively affect those around it. On the other hand, if your home has a well-manicured yard, good outdoor lighting, and so do all the other houses on your block, your value is going up.
What nearby homes have sold in the past 6 months?
Have there been short sales or foreclosures in your neighborhood in the past 6 months? Unfortunately, these types of sales will negatively influence the value of your home as well. Look into how the homes around you have done on the market when considering how yours may do as well. Too many for sales in an area may over-saturate it, but if the sales have closed and it’s a desirable neighborhood, then these circumstances can reflect positively on your home’s value.
What is the cost per square foot of nearby, recently sold homes?
The amount of livable space included in a home is one of the biggest determinants of price. Naturally, the more square footage, the higher the value. However, other factors will affect the price per square foot, such as where the house is located (a large home in the city will be valued differently than a large home in the country, for example), how usable the space actually is, or how other nearby homes are doing. Looking at similar homes’ cost per square foot will help give you an estimate of how the current market is doing and where your home may fit in.
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