Factors That Affect the Home’s Value
Many homeowners are under the impression that all homes naturally appreciate in value over time, but this isn’t necessarily true. Most homes – that is, the physical building – deteriorate over time, and depreciate in value. When you sell a property, you are not just selling the building, but also the land it is built on – in the end, the land the property is on (the location of the home) almost always appreciates in value. Keeping that in mind, here are some of the factors that go into calculating your home’s value.
- Location: Good public schools, low crime, and minimal distance to supermarkets, stores and coffee shops all have a big effect on your home’s value. Your real estate agent will have information on how your neighborhood will affect your home’s value. And if your home happens to be in a hot real estate market, you probably know that already.
- Recent Repairs: Doing periodic repairs to keep your home in excellent condition will go a long way toward increasing your home’s value. Many people estimate that putting a new roof on an old home will recoup 80% of its value. As the saying goes, “Homes don’t get younger.”
- Macro Factors: These include National Real Estate trends, buyer or sellers’ market, local growth and development.
- Bedrooms, Baths, Lot Size: While important to finding the right buyer and the right Comparables, these factors might affect the home’s value the least, and are difficult to estimate their value to the building. However, the general rule of thumb is that kitchens affect the home’s value the most, then the bathrooms, and last, the bedrooms. Additionally, a home on a large plot of land will only affect the home’s value by 5-10%, and only then if it’s usable land.
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