What Affects Your Home’s Market Value?
Your Property: - Location, Location, Location
Widely thought to be the single most important aspect of real estate. Think about what is the most important factor for you when you look to buy. Price and location often times will go hand and hand with buyers. If your property is located in a nicer area, your property will be in greater demand and can seek a higher selling price. (Taken from an article off of Fortune Builders.com)
- Condition of the Home
Has the home undergone recent renovation that is worth capitalizing on or has it not seen any remodeling or improvements for a few decades? Is the cost to bring the home’s features back into the present day going to be a factor in a potential buyer’s offering price?
- Design Style
Every house has a style. Sometimes it has two or more; because of renovations and new, eclectic mixes, fitting a home into one specific category can be daunting or even impossible. REALTOR® Magazine has compiled a convenient compendium of common styles: (Realtor.com)
Art deco, Bungalow, Cape Cod, Colonial, Contemporary, Craftsman, French Provincial, Gothic Revival, Greek Revival, Italian, Tuscan, Mediterranean, Neoclassical, Pueblo, Spanish, Spanish Eclectic, Early Californian, Ranch style, Two Story, Tudor, Victorian, the Western “Stick”, Split Level, Shingle, Shotgun, and Shed…....to mention a few. Popularity and demand of certain residential styles with varying structural elements come and go with trends and are sometimes signature of a region or community.
-Appraisal is always a consideration
A home appraisal is one of the most important components of (a buyer) getting approved for a mortgage. This appraisal ultimately decides just how much a bank is willing to lend. A home appraisal is the best way for a lender to see if they won’t lose their seat on the deal. (goodfinancialcents.com)
There are three traditional groups of methodologies for determining value. These are usually referred to as the "three approaches to value" which are generally independent of each other:
The sales comparison approach (comparing a property's characteristics with those of comparable properties that have recently sold in similar transactions).
The cost approach (the buyer will not pay more for a property than it would cost to build an equivalent).
The income approach (similar to the methods used for financial valuation, securities analysis or bond pricing).
If a home inspection is performed prior to the appraisal and that report is provided to the appraiser, this information can cause the appraiser to arrive at a different opinion of value. In some cases, it may behoove a seller to employ a Certified Home Inspector before listing the property to consider remedying the major, even the minor, highlights that may be reflected in a report before putting the home on the market. A “clean” home suggests that the property has a history of being well maintained and leaves less for a buyer to haggle over and decreases the likelihood of contingencies being added into the purchase contract. (Wikipedia)
The Current Market:
- Mortgage Interest Rate
Lower Interest rates may increase your range of buyers that can afford to give consideration to your property, whereas higher interest rates may sway buyers typically in your level of market into less expensive homes to compensate for the increase rates cause to their mortgage payment. See our Mortgage Calculator and rates page.
- Buyer Demand
Does your home have any element of a “must have” featured? As a seller, you might give consideration to hiring a staging decorator or investing a little more in your curb appeal to increase the aesthetics inside and outside of your home. In some markets it is crucial to set your property apart from the competition. See our Buyer and Seller page for more.
The typical theory of Supply and Demand applies here: Inventory is low, thus increasing the demand. In reverse, if inventory is high, sellers are forced to be more negotiable as they enter into competition with other sellers.
The Comparative Market Analysis, (CMA) uses MLS listing information for homes similar to yours. As your Realtor, we analyze each property for its sales price, how quickly it sold, number of offers and if there were concessions make to close the transaction. Combining our price analysis and that of our Pricing Committee, you are assured of a strong suggested listing price backed by years of real estate experience in this local market.
The Comparable Market Analysis
- Active Listings:
The competition: Familiarizing ourselves with other properties currently on the market, we get a strong indication of where we need to price our subject property in order to compete with other sellers in attracting buyers.
In escrow, price is undisclosed until closing. We can only give consideration to the asking price and how many days the home was on the market before it went into contract.
Recent sales provide a solid basis for current market values.
Give consideration as to why a property failed to win a buyer within their listing period. This may present factors we would choose to avoid in our marketing plan.
San Luis Obispo Realty Pricing Committee
- Share CMA:
Group analysis. Opinions are shared within our brokerage, valuable inside market information may be presented.
- Tour Property:
More than one impression. By opening the property to other industry professionals, we collect feedback that may be beneficial knowledge to how the home presents itself in the market.
Please see our team of real estate experts, ready to help you make the very best decisions when buying and selling real estate in San Luis Obispo. Contact San Luis Obispo Realty to get a FREE Market Analysis of your home. Search all SLO County Real Estate here!