What is your home worth? A wide range of factors go into that question…
What is fair market value? Fair market value is the price a home will sell for, if put on the market for a reasonable amount of time. Buyers, sellers, and financers must all agree that the home is worth this selling price. The fair market value is also used by the tax assessor to calculate property taxes and by insurance agencies to set premiums. There is no simple calculation in determining what a home is worth but there are factors you can use to arrive at an educated guess.
Here are several factors that play into determining home value:
LOCATION: What is the neighbourhood like, school districts, traffic, is there any new development going to be happening, any properties going to be rezoned?
FEATURES: Upgrades in a home add value but if you are putting on granite to a home that is in a not soo good area you maybe throwing good money after bad! Upscale finishes and fixtures — high-quality wood floors, stone countertops, premium appliance brands —It’s still about location, location, location.
SIZE AND LAYOUT: Homes that are all similar in terms of size may vary by square footage price. In general, buyers place a premium on open-concept layouts, which tend to make a place feel bigger, as do high ceilings. In terms of pure square footage, giant is not always better. Buyers nearing retirement are less likely to want a gargantuan place or a second story — so an area’s demographics play an important role in a home’s worth in its particular location.
CONDITION AND AGE: Like people, some houses age better than others — due in no small part to how well they’re maintained. The older the home, the more important that it clearly show signs of proper, ongoing care. If the homeowner has kept records of services and repairs, all the better. A poorly kept house may be cheap to buy but expensive to own — and even difficult to insure.
CHARM: Again, like people, some houses are just easy to like. But bargain hunters should note that charm can be easy to fix. A well-built and maintained house with a cluttered interior, off-putting décor or an ugly front door can be a buyer’s best friend. It pays to look past the surface to a structure’s true value.
Professionals Are the Best
Both professional real estate appraisers and real estate agents can provide reliable estimates of fair market value. Note that appraisers charge for this service, but real estate agents don’t.
Real estate agents and appraisers who are familiar with the areas where you are buying or selling know more about properties in the area.
Note that even when these professionals give their opinions of value, there are no guarantees. Unforeseen factors can affect the ultimate selling price, such as when a neighbor suddenly decides to put three cars up on blocks in his front yard or a neighboring property falls into foreclosure.