Factors that Affect Home Price
Median sale prices have been increasing for over two years consistently now and last June they reached another all-time high. We all know it has been in large part a simple equation of limited supply with greater demand. However, what about on a micro level within your market? What drives the price of a particular home in a specific place?
A Florida appraiser shares that pricing often hinges on three factors: location, product and timing. Product and location are somewhat connected where it can be the right home in the right neighborhood. Timing is more of a fluctuating element as it can have to do with what the local competition of inventory is.
How Appraisers Determine Value
Appraisers will approach a home’s value beginning with a physical inspection of the home’s bones. This includes core items such as roof, HVAC system, bathrooms, kitchen and condition of everything in between. Next, the appraiser will consider location and neighborhood which will include evaluating the recent comps and adjusting the price based on comparing your home to those.
Home Features that are in Demand
This also can mean which items have a big impact on the price. Granite counters used to be a hot item yet these days they are just considered standard. Design trends are showing that interior colors have switched from shades of beige and brown to more of tones of gray. These and other preferences are sometimes regional including having a pool or a second story which may or may not add value.
How Sellers can add Value
There may be select trends for your particular market, but one thing that is universal is to have your home in perfect condition when listing it for sale. If you have put off making some repairs or improvements then taking care of them first is always best. Buyers will resist your home if there are obvious signs of neglect and more significant repairs will certainly be found in a home inspection. Finally, be sure the exterior of your home is looking excellent. Your home’s curb appeal is important as it is the first and last thing every buyer will see.
Traps to Avoid
In markets like the current, there can oftentimes be multiple offers and bidding wars. At times when this happens, the purchase becomes more emotional than practical. Don’t lose sight of the property’s market value and replace it with your own. Just remember if you are getting a mortgage then your home will need to appraise appropriately otherwise the deal will fall through.