One of the most important things in getting a home sold in many of todays local markets is pricing. Sellrs need to know what does and does not affect their homes value.
Perhaps the touchiest subject for home sellers across the nation is price. The truth is, most people, whether they are selling their home or not, have an inflated opinion of what their home is worth. It may be hopes for a higher appreciation rate or the success of many real estate investors on the “flipping” shows that make people believe that a little paint here and some landscaping there dramatically affects the value of ones home. While this varies from region to region, there are still key elements that are essential to pricing one’s home correctly.
What DOES Affect a Homes Value?
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- mple. If supply is high and demand is low, price drops. If the supply is low and the demand high, price increases. Housing is no different than other products in this regard.
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- At the end of the day, anything is only worth what someone else is willing to pay for it. How does one know what buyer’s are willing to pay? Real estate agents and appraisers both look comparable properties that have recently sold, typically within the last six months. This gives a good indication of what buyers of a certain population are willing to pay for a certain type of property (i.e. 3 bedrooms, 2 baths, 1500-200 square feet, etc.)
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- ons include things such as adding a bedroom, bathroom, garage, etc. These do not include maintenance, such as painting and caulking which need to be done on a regular basis. Sellers need to understand that when redoing floors, decorating with designer paints and even adding stainless still appliances, they will not see a dollar for dollar return.
What DOES NOT Affect a Homes Value?
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- ess of what a person originally paid for a home, this does not affect the market value. While some areas of the country are seeing double and triple increases in property values, others are seeing appreciation rates as low as 10%. In such markets, it takes time to “turn a profit” off of selling a home.
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- y sellers choose to sell after they have only been in their home a few years. In recent years, 100% financing has been a popular way for first time buyers to open the door to their new home without bringing lots of cash to closing. However, if these homeowners find themselves moving in two to three years, and especially if they have refinanced, they may find themselves owing more for the property than what it is worth in some markets. Unfortunately, this does not change the market value and what the average buyer will eventually pay for the home.
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- ed above, certain renovations and updating may not greatly affect the value of the home. For example, electric baseboard heat is functionally obsolescent in many parts of the country. But replacing the heat and updating it to a heat pump or gas furnace won’t necessarily give the seller back the $2000.00 or so dollars it took to replace. Such updates will make the home much more saleable and much more marketable, which may have some impact on the price on the dotted line, but it will not bring in tons of extra money for the seller.
The copyright of the article The Listing Price in Buying/Selling a Home is owned by Sara Richmond-Walls. Permission to republish The Listing Price must be granted by the author in writing.
