One of the biggest investments that someone will ever make will come when they purchase a home. Whether you are looking to purchase a new home or sell an existing one, you will want to know what the fair value of your home is. It is also a good idea to make an educated guess about what the future value of the home could be based on various factors. Overall, there are a variety of factors that affect home value that you should take into consideration about whether you are looking to buy or sell a property.
Characteristics of the Home
One of the most significant factors that will influence the overall cost and value of a home is the physical characteristics of the home and property. Some of these items include the square footage of the home, the number of bedrooms and bathrooms, the size of your plot of land, and what type of storage space you have on your lot. Generally, larger homes with more space and land will be worth more than smaller properties with similar factors.
Condition of a Home
Another factor that will directly affect the value of a home is the condition of the property. When someone is looking to buy a home, they will generally pay a premium for one that is modern and in good condition. Those that have modern kitchens, bathrooms, and primary bedrooms will often be valued more than one that has not been updated in the last couple of decades. The physical condition of the property will also be impactful when it comes to the full value. Some items that can hurt the value of a home include whether it needs a new roof, if there are signs of structural damage, or if there is mold damage. In many cases, these items will not be discovered until a home is under contract and going through an inspection.
Market Comps
When it comes to buying or selling a home and determining its value, it is important to consider the market comps. Depending on where the home is located, there could be many sales that take place on a monthly basis. In these situations, it can make sense to value a home based on the recent sales prices of homes in the area. Generally, you should look to compare your home to those that are located in a similar area, are comparable in size, and have similar upgraded features.
Location of Property
The overall location of the home will also make a big impact on the value of the property. Beyond looking at comps that have been sold, you should also consider factors concerning the specific location of the home. If your home is located within walking distance of schools, public transportation, and central business districts, it will sell for a premium. Other factors that can influence the value include whether you are located on a busy street and what trends are coming that can impact the market and specific location in the future.
The Overall Economy
While housing markets tend to be local, the overall economy and economic forces can influence the value of a home. When times are good with low unemployment rates and a strong stock market, there can be more demand to purchase homes, which will increase the value of properties. At the same time, a poor economy can make it more of a buyer’s market and push the value of homes down. The current interest rate environment and ability to get an affordable mortgage will also impact the values of properties all over the housing market.
As you are looking to buy or sell a home, it is important that you properly assess the value of the property. Overall, there are various factors that can influence the value of a home today and what it will be worth in the future. It is a good idea to take these factors into consideration whether you are looking to buy or sell a property.
