Certain things will always influence home value, no matter what. If you want to sell your home, it can help to know which of these enduring factors will give your home its highest earning potential.
1. The Location
An excellent home can sit on the market for long periods of time if it’s not in a good location. Very few people want to live where other people dare not go. However, different individual aspects of location can influence home value to a greater or lesser extent.
Neighborhoods – The quality of the neighborhood or environment that surrounds the house will become a factor in that home’s value.
Job prospects – Many homes increase in value if they have a location close to where people can find good-paying jobs.
Schools – People tend to want homes close to good schools, and are often willing to pay more for that proximity.
Access to recreation – Proximity to local entertainment, recreation, and shopping can also help to influence a home’s value.
Nevertheless, what makes for a good location for some could represent a bad location for others. According to Brendon DeSimone, Realtor, and real estate investor:
“… very close proximity to a fire station (good if your house is on fire, not so good if you’re trying to sleep); a hospital (frequent ambulance sirens); an airport (sounds of jet engines 18 hours per day) or a school (traffic from buses or parents dropping off children or kids yelling and playing).”
2. The Market
The economy plays a strong role in home values across the nation. This applies to the local economy surrounding the house itself, and the larger economy driving the real estate market. The market fluctuates and people hesitate on buying depending on their own economic situations. You can look at this from various angles.
Economic indicators – Sometimes it’s just not a good time for people to purchase a home. Other times, job market growth or local innovation can cause a home’s value to increase because it’s close to these things.
Market conditions – Local real estate markets can go through ups and downs. A buyers’ market and a seller’s market both introduce conditions that can greatly affect a home’s value.
Lending and interest – Banks, lenders, and other financial institutions have a high level of sensitivity to both local and larger economic conditions. If the banks aren’t lending, or the interest rates have shot up, home values will correspondingly drop. The opposite situation can also happen, which can lead to an influx of potential buyers and higher home values.
3. The Size
The size of both the home and its lot help to drive the value of the home. An appraisal of a home starts with the lot size, and the bigger the property, the higher the value. Value will also come from what someone can envision doing with the property.
The more land, the more someone can add, change, or develop as they see fit. Even if the house itself isn’t the greatest, a larger property will still seem like a valuable investment to a potential buyer.
The size of the house itself matters for much the same reason. The bigger the home, the more possibilities. For those with imagination, size can make all the difference.
4. The Structure
A sound structure translates to more value. Home value increases if the property:
- Makes use of up-to-date building materials
- Adheres strongly to modern building codes and standards
- Can accommodate modern HVAC solutions
- Has a well-maintained roof
- Isn’t a fixer-upper
Even an older home will see an increase in value if the house contains structural and modern upgrades. Home values can decrease in direct relation to how much work a potential buyer thinks they have to put into the house.
In both older and newer homes, obvious signs of maintenance and care help to improve value. If you walk into a house that looks like no one ever loved it, you’ll likely offer a far lower figure than the asking price.
5. The Upgrades
Sometimes, the accumulation of little upgrades can influence home value more than other, larger factors. Every little thing you do to improve the home and property adds a little more value. The little touches can make a huge difference for sellers who are ready to sell their homes sooner than later.
Some examples of little upgrades that add up can include:
- A fresh coat of paint
- Updating the cabinets
- Landscaping and improving curb appeal
- Upgrading the thermostat
- Newer appliances
Some slightly bigger upgrades can include things like a finished basement, room add-ons, or garage upgrades. According to a Realtor report, some of the upgrades that can provide the most value include kitchen renovations, HVAC replacement, and basement renovations, among others. That same report points out new roofing and hardwood floors offer the best return on investment.
6. The History
Everything about a house’s past can influence home value. Savvy homebuyers might go out of their way to dig up old information specifically to try to lower the asking price. Much like other categories that influence value, the history of a property isn’t just one thing.
Previous owners – Did the home previously belong to someone you won’t want to meet on a dark street? Did someone commit a crime on the property? These types of things can come up, so it’s better for homeowners to know about them sooner, rather than later.
Old damaging – Buyers want to know if the property ever went through a flood, fire, earthquake, or any other type of disaster. This also includes things like insect problems, mold, plumbing issues, and basically anything else that occurred in the past.
Historical value – Buyers and appraisers look at the home’s value over time. If the property maintained a high value throughout its life, then it would make sense that it still has one. If the value of the home grew over time, then mentioning the reasons for that growth will help to corroborate a higher asking price in the present.
Other things can influence home value, but these factors aren’t all-or-nothing indicators of value. Selling a home sometimes must occur quickly for any number of reasons. In such cases, you may not have the time to do all the research, fixes, and upgrades necessary to swing the house’s value in a large way.
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