Curious about how much your property is worth? When determining the value of your home, there are many factors to consider: its location, size, condition and updates, comparable properties, and schools. These five features can significantly impact the value of your property. Homeowners who are preparing to put their house on the market should also pay special attention to these key factors when pricing their homes. All too often, sellers underestimate or overestimate the value of their home. This massive home pricing mistake either leads to a home selling too quickly (and for not enough money) or to not selling at all (or, at least, not for an extended amount of time). To maximize the amount of money you earn on a home – and to sell it without having to make price cuts – consider these factors below when pricing your home.
1. Location, Location, Location
Just about everyone has heard the term “location, location, location.” As a REALTOR® in DFW, I tell my client’s frequently, “If your house was in that neighborhood, a home like yours would sell for 50% more”. The point is, where your home is located is a major factor in determining the value. If you were looking for a home in New York City or San Francisco, you would expect to pay much more than a similar property in the Dallas-Fort Worth area. Values can even vary greatly from city to city in the same metro area and even from neighborhood to neighborhood in the same city. Your home’s proximity to schools, shopping, and entertainment can also affect its value. Is your home close to a popular tourist attraction, lake or park? That can also be a consideration when determining the value or your home. Additionally, buyers want to know they are purchasing a home in a safe area. What are the crime statistics in your area?
2. Square feet and yard size
Obviously, the home’s square footage is factored into the pricing of a home. You wouldn’t expect to pay the same price for 2 homes that are finished similarly, in the same neighborhood with one home being 1500 sq.ft. and the other home 2000 sq.ft. A one-story may be worth more per square foot than a similar two-story home. Lot size factors into the value of a home as well. Is the home on a .2 acre or .75 acre lot? Is it a multiple acre property? Is the property landscaped, irrigated, pasture, etc. And of course, we get back to location of the property to determine value based on size of property.
3. Home Condition and Updating
Clearly the condition of a home affects how much a buyer is willing to pay for a home. Not everyone wants a fixer-upper. In addition to location and size, the overall condition weighs heavily on the determined value. A run-down, dilapidated home won’t be worth as much as neighboring properties that are in good condition with updates – even if the home is large and located in a highly coveted neighborhood. The types of repairs that are required not only affect the price a buyer is willing to pay but also whether or not they can get a mortgage on the home. Foundation & roof issues are big concerns. Flaking paint and rotting wood on the exterior of a home are also red flags. Buyers that see these obvious problems are concerned about how the home has been maintained and on certain loans, an appraiser is going to call the conditions out and the lender will require repairs to be done before they will agree to complete a mortgage on the property.
Speaking of appraisers, they also look for current updates in a home. An appraiser told me that homes should be updated every 5 to 10 years to bring them to current standards. When your home is appraised, they are comparing it to similar properties that may have been updated. New homes are being built with stone or quartz countertops these days and that’s what most buyers want in their kitchens and bathrooms even though they are buying a pre-owned property.
Kitchens and bathrooms are the 2 most important areas to consider when updating a home. You don’t necessarily have to do a $50,000+ remodel, but some consideration and updating should be done. New kitchen and bath fixtures are fairly inexpensive updates. Fresh paint and new hardware on cabinets can make them look updated. In fact, fresh paint can do wonders for the interior and exterior of a home. Choose popular neutral colors throughout the home. Red dining rooms, which were once in style, are not really as desirable these days. You should also consider removing or painting over paneling and/or wallpaper (make sure to seal wallpaper before painting). Flooring is also a big consideration. People are moving away from carpet and instead choosing hard flooring such as tile, engineered hardwood or luxury vinyl for high traffic and living areas. And though once popular, carpet is certainly not acceptable anymore in wet areas like bathrooms.
4. Real Estate Comparables
Appraisers typically have the last word in what a home is worth because the majority of buyers are obtaining a mortgage to purchase the property. When helping to determine the value of your property, your REALTOR® should approach pricing your property as an appraiser would. They will look for homes that are similar in size (square footage, typically plus or minus 200-400 square feet of your property), year built (trying to find a home built close to the same year as your home), the same number of stories, similar lot size and similar amenities (i.e. swimming pool or no swimming pool). Previously SOLD homes are the most reliable comparable because the present an accurate history of value as opposed to homes currently ACTIVE on the market, which really do not portray an accurate value comparison. Appraisers and REALTORS® look first for homes that have sold in the past 6 months and want to find at least 3 comparable homes. They start looking in your neighborhood then expand their search trying to find a comparable as close to your home as possible. Sometimes they will look for homes that feed into the same elementary school. After they have found the comparables, they will do adjustments for things like swimming pool, lot and home size, home condition and updating, etc.
If you are interested in getting an idea of what your home is worth and seeing what properties in your area are selling for, you can receive an instant, no-obligation market analysis report by clicking this link and answering a few simple questions.
5. Local schools
Many times a buyer moves to a certain area or neighborhood because of schools. Clearly if a family has school-age children, local schools factor into their buying decision. So yes, schools and school districts can be just as important in determining the value of a home as the location and condition. The availability of private or charter schools nearby can also be a factor. If you are curious about ratings of schools in your city, go to GreatSchools, a nonprofit organization that rates PK-12 schools in the U.S. based on test scores and other factors.
Call us today if you would like more information or help determining the value or saleability of your home. Contact the Sullivan & Sullivan Real Estate Team at Keller Williams 817-330-9235.