Determining Market Value
Many Homeowners use Zillow or sales of other homes in their neighborhood to estimate their home’s market value. This is a good start, especially in neighborhoods with a single Builder, but there are a number of factors that can affect the value of a home. Even homes that have the same floor plan and are located in the same neighborhood may have very different values.
Here are some of the features that contribute to a home’s value:
Location: Views, Privacy and Noise are important considerations. Is your home near a major road, railroad track, etc.? Not good. Is there a Mountain View from the back yard? That’s a plus. Can your neighbors easily look into your back yard? Are there a number of two story homes that overlook your q back yard? Privacy is very important to some Buyers.
Condition: The condition of a home affects market value but it also has an impact on the time it takes to sell your home. Most Buyers want homes that are “move-in ready” condition and will either shy away from homes needing work or place a “lowball” offer on them.
Dated Fixtures: If the kitchen or bath fixtures are old & outdated, it may take longer to sell if the other homes in the neighborhood have current ones. In most cases I would not recommend making any fixture changes as you will likely not recover your costs.
Old Appliances: As with dated fixtures, older kitchen appliances may lengthen the time it takes to sell your home, especially if competing homes have new ones. Newer appliances do add value to the home and you may consider replacing them if they show a lot of age and wear.
Garages, Pools & Roofs: Garages, Pools and Roofs are the most common features that affect market value. For example, homes that have a 3 car garage a swimming pool will have a higher market value than those with no pools and a 2 car garage. Tile Roofs are also considered a plus as compared to shingle roofs.
Living Space: This discussion started with comparing the same model homes but what about homes of different sizes? Larger homes will usually sell at a higher price than smaller ones.
Interior Upgrades: Homes with granite countertops, upgraded cabinets, flooring, etc. will typically sell faster than those without. It depends on what is most common in the neighborhood. Buyers will usually choose a home that has been upgraded over one that has not, but price can be a factor. At some point Buyers will purchase the home without the upgrades as they can “install them later”.
Landscaping: You have probably heard that the “curbside view” of a home is very important. Ideally Buyers will see your home as they are driving and looking at house numbers and “hope” your home is the one. The front appearance sets the Buyer’s expectations, and you want them to have a positive attitude when they walk through the front door. Most homes do not require much in front yard landscaping. Adding some color helps, and there are many inexpensive plants to choose from – Pansies is one that comes to mind.
Back yards vary considerably between homes and have an impact on both market value and time on market. Homes that have dirt back yards will take longer to sell. Landscape rock and a few plants can make a world of difference and homes that are already lushly landscaped will receive the best and fastest offers.
Neighborhood: Over time, neighborhoods are often identified as being within a specific price range. The largest homes with the most features will command the highest prices but there is a limit. If a home’s price is higher than the range for the neighborhood, then Buyers will either make offers within the range or may consider other neighborhoods.
Conversely, smaller homes with few features will usually command a higher price than expected as their value is raised into the neighborhood’s price range.
As you can see, there are many items to consider when determining the market value of a home. A good REALTOR® will consider all of the above features (and a few not listed) when recommending a listing price for your home.
They should be able to back up their recommendation with actual sales data and their analysis should make sense to you. If it appears the agent is simply pulling numbers out of the air, you run the risk of selling your home below market value or waiting forever for an offer if it is priced too high.
Catherine and I will be happy to perform a market analysis for you. Just select this link, How Much is My Home Worth?, answer a few questions and we will prepare a detailed report for your review.