With much of the housing market, it can feel like the prices are random, and nothing has concrete reasoning. Fortunately, there are solid reasons why our homes end up being priced how they are, and although we would love for their value to skyrocket suddenly, these four items are what truly control the cost.
Location of the Property
The placement of your home in a city can drastically change the value of the property. Even changes as little as being on the other side of a highway can influence a home’s value by tens of thousands of dollars. Although this is a nice perk when you’re purchasing a home, it can be rough to be in a less expensive area when you’re trying to sell.
The reason for these price variances might be the history of the area, the year the homes were built, or even the quality of the construction in that neighborhood itself. HOAs can also add value, which boosts the price of homes for entire communities.
What Kind of Market the Area Is In Currently
If you’re in a sellers’ market, there’s no question that your home will be able to sell for more money and will be capable of earning competitive bids. A sellers’ market has a lot of power in your corner since there are far more buyers than sellers and can often create a frenzied market.
Unfortunately, there’s another side to the coin. Before you start looking at your seller closing costs calculator, be sure you’re not in a buyers’ market. These markets, where there are far more homes available than buyers, can see the price of your home plummet, leaving your property on the market for far longer than anyone wants.
Size of the Home and Land
This may be the most obvious reason on this list, but it still stands as true! The larger your home is, and the more land it’s on, the more valuable it will be. The only time this doesn’t ring true is if the land has problems with it or the home itself is run down. In most properties, size matters!
Unfortunately, the only way you can add value through this is by making a huge investment and building on your current property.
How Updated and Well Maintained It Is
The condition of your property can make a large difference as well. As we just touched base, people are willing to pay far more for a property that needs less work. If a home is in disrepair, has problems with leaking, or is extraordinarily outdated in every room, this can cause the house’s value to plummet.
This can become a major issue if the homeowner wants to sell for a high-profit margin but doesn’t want to wait or deal with the investment of updating the home. Another problem can come from time if you’re in a sellers’ market now, and in the time it takes to update the house, the market flops back to a buyers’ market. This can be extraordinarily frustrating and can leave you with losses in the long run.