Selling a home can be a challenging and stressful experience. There is always the delicate aspect of establishing the actual value for the property. Keep in mind that if you price your home too high, you run the risk of scaring off potential buyers, and if you price it too low, you run the risk of leaving money on the table.
Therefore, you need to understand the critical factors that determine a home’s value to set the right price. Here are some of the essential factors that influence a home’s value.
The location of your property is one of the most critical factors that affect how much a home is worth. Is it located close to the city center? Is it in one of the most sought after neighborhoods? Is it close to good-performing schools, high-end restaurants, public transport, shopping malls, or any other social amenities?
Individuals generally want to live close to their workplaces and where they enjoy their free time. Therefore, properties located in places with high-class social amenities will generally attract high prices.
There is also the fact that some neighborhoods/suburbs simply have a better reputation than others due to factors such as crime rates and unemployment. Two properties situated on opposite sides of a street can differ substantially in value if they are located in different neighborhoods.
Age and Condition
Typically, newer properties tend to appraise at a higher value than old properties. For new properties, most parts of the house that may require upkeep are still new and, therefore, less likely to develop problems.
For instance, if we are talking about a new home with a roof that has a 20-year warranty, then that translates to money that the property owner will save over the next two decades.
This is in contrast to an old property that may require the property owner to call in roof repair Montreal experts to replace the roof in a few years.
Home Size and Usable Space
Another critical factor that determines a home’s value is its size and the available amount of usable space. Bigger and spacious properties can positively impact their valuation compared to small and squeezed homes.
In fact, the overall value of a home is mostly estimated at a price per square foot. For instance, if you have a 3,000 square foot house selling at $300,000, then it means that the price per square foot is $100. However, the prices homebuyers pay per square foot tend to vary greatly depending on a wide range of factors.
In addition to the square footage, a property’s usable space matters greatly when it comes to establishing its value.
But, keep in mind that unfinished basements, attics, and garages are not counted in usable square footage. Livable space is what most appraisers and potential homebuyers are interested in.
Supply and Demand
The law of supply and demand affects almost every aspect of the economy, including the property market.
Generally, if there is an increase in demand and the supply is fixed, the prices of homes will rise due to the buying pressure.
However, if the demand is low and supply is high, you should be prepared to sell your property at slightly low prices because buyers have bargaining power in such a case.