What Factors Affect a Home's Value?
I get this question all the time. Knowing the value of a property is my specialty. There are many factors that affect a home’s value.
In order to price a home correctly, I look at what the most similar properties have sold for within the past few months. The market changes constantly so what happened in your neighborhood a few years ago can be very different than what is happening right now. I look at the most recent sales, the most similar style, living area, number of bedrooms, bathrooms, finished basements, garages and more. Then I adjust mathematically to calculate how your home differs in comparison to the homes that have recently sold. That gives me a base line. Then I look at updates, pools, views and other unique features. These all get calculated in to come up with the value of your home in today’s market.
There are a couple more things that affect the sale price of your house. The first is competition on the market, otherwise known as inventory. Supply and demand affects value and right now there is limited supply so houses are selling fast. The other factor is marketing. How well your house is promoted has a huge impact on the amount of people looking at your house, otherwise known as demand.
Simply listing a house on the internet does not necessarily create a high demand. Professional pictures, timing an open house correctly, and advertising the open house well, are a few factors that increase demand. I invest thousands of dollars on conventional and internet marketing on every listing to increase demand, even when there is low inventory. I do this because it could create a bidding war and get you a considerable amount more for your house.
Being part of a large company like Keller Williams also helps increase demand. I have more than 200 agents in my office. I encourage these agents to show their clients my properties that may not have considered Sterling or Princeton as an option.
At many appointments, I hear things like “I looked up my Zestimate® on Zillow® so I know what my house is worth” or “My friend has a similar house in a different town so I am probably worth the same as her house.”
First of all, you should never rely on the Zestimate®. Zillow® has an algorithm that factors in many aspects of the house and area but it will never take the place of having a local expert give you a Market Analysis for the value of your home. Every house has unique features that factor into the value. Every town is different and even neighborhoods within the same town can change the house value. Having a full time, local Real Estate Agent come into the house to see all the features, layout and upgrades is the most accurate way of determining the value.
I have been in most of the local houses that are for sale, so that way, I can accurately compare them against yours. Prices are changing rapidly right now so if you had a market analysis a month ago, you might want to have me take a look just to be sure your house will be priced correctly.
Have a Real Estate Question?
Feel free to email me any of your questions and I would be happy to answer them next month in this column or directly to you. Email me at email@example.com