There are a number of factors that affect property value, and it’s important to know them before you buy or sell a home to help you determine market value.
This post will help you learn how to determine a property’s value so that you buy and sell for the right price.
Read on for the most essential factors that affect property value!
Location, Location, Location!
The location is one of the most important factors that affect property value, and homes can differ substantially based on the cities, subareas, or even streets that they are on!
Is your location close to a city centre? Is it nearby a skytrain station or bus? Is it close to shops, schools & restaurants? Alternatively if it’s on a busy street, in an area that has a bad reputation for unemployment or crime, or far away from the downtown core then the home will likely have a lower value.
Location is one of the things that you simply cannot change when it comes to your home. If a similar home is in a better location, you’ll need to position yourself in the market accordingly in order to sell in a timely manner.
Condition of the Property
If a home is well kept, then it will sell for more than a home that has not been maintained over the years. The more a home feels cared for and maintained, the more valuable it will be in the buyer’s eyes. This may be with regards to the cosmetics of the property, but also pertains to upkeep such as roof, hot water tank, furnace, and HVAC maintenance (to name a few).
Furthermore, if your home has had history with wind, fire, water damage, foundation issues, infestation, or matters of this sort then this may affect the property value negatively. Even if it’s been fixed and there are no further issues, buyers will feel that there may be potential for this issue to occur again and will want to have this taken into consideration during the negotiations.
Style & Design
This can be separated in to two categories:
Style and design are in the control of the homeowner, as they can choose to update architecturally and/or cosmetically. Alternatively, they can choose to adjust accordingly and position themselves strategically without performing these renovations.
The layout, size and age of the property will affect the value of a home. For example, most people find “open concept” homes attractive and they put a higher value on a home that has been made open concept than one that is more closed off.
In most people’s eyes, the bigger the better – so a 2 bedroom condo is likely to be worth more than a 1 bed in the same area. If your home is newer and under warranty (2-5-10 warranty in BC) then that will add value as well. Features like extra bathrooms, more parking, and dens will also impact the property value in a buyer’s eyes.
Additional factors like rental capabilities will impact the value of a property. If there are two homes that are identical except that one has a legal suite, then the one with rental potential will sell for more. If a property has good investment potential then this will impact it’s value for the better. Factors that open up the buyer pool to investors will typically have a higher value.
Cosmetic factors do not require the changing of structure, but rather involve renovations such as upgrading the flooring, kitchen counter tops, vanities, paint, and such.
Buyers like properties that are move in ready – the less they have to do in terms of renovations the easier for them! The key places that buyers typically like to see renovated are the kitchens and bathrooms.
However, keep in mind that if your cosmetic upgrades are not in line with modern day design then performing the renovations will be both costly and unproductive. An example of this would be replacing all of your old carpet with new shag carpet instead of hardwood flooring.
Keep in mind that regardless of the renovations you do, if the buyer feels that they need to re-do your upgrades then there was little point in completing them in the first place. However, overall, most buyers will pay more for a property that is renovated than one that is in its original condition.
Exposure & The Realtor You Choose
The amount of exposure that your home receives will directly correlate to the amount of offers that will be brought to you. Our team at Michael Cowling & Associates is here to implement marketing systems that reach as many potential buyers as possible, which will ultimately result in the right buyer coming along to write an offer on your home.
The amount of exposure that you receive also links to the pricing strategy. Pricing is an art, and Michael’s experience and knowledge will be beneficial when it comes to understanding buyer psychology and pricing.
Having a realtor like Michael that knows the neighbourhood you’re in, has experience selling the style of home you have, and has an aggressive marketing plan will ultimately bring more exposure to your home and convert those leads into a sale!
How you choose to price your home in comparison to other homes on the market will contribute to how much exposure your home receives. The more exposure, the more likely you are to receive an offer.
When you choose Michael Cowling & Associates, we can provide you with comparable properties in your neighbourhood and surrounding areas. These will include recent sales (the success stories), active properties (your competing properties), and expired homes (the ones that were unable to sell).
This market positioning analysis also includes the current state of the market. How does current supply and demand affect your home’s value? Have mortgage rules become tighter, thus limiting willing buyers to purchase? Has the interest rate gone up? Are you in a rising, neutral, or falling market? These will all play in to your market positioning and affect the value of your home.
The first 21 days of a listing are essential, and statistics show that interests drops off after the first 3 weeks. Choosing a proper listing price from the start that is in line with the rest of the market will give you the best chance of receiving the best price, and positively impact the value of your home.
Are you looking to buy or sell property? If you’d like, we can have a real estate expert show you the most efficient process that saves you thousands of dollars, a lot of time, with little or no inconvenience to you. Contact us today!
RE/MAX Michael Cowling & Associates