Understanding the value of your home is critical for several different reasons, such as if you decide to sell your house. Today, it’s easier than ever to conduct an accurate and reliable valuation of your home without having to hire expensive experts. There is a range of tried and true principles you can follow when seeking to conduct property valuation. Here’s how you can easily value your home accurately.
The neighborhood of your home has a significant influence on valuation. If you live in an exclusive area that is home to many expensive properties, you can expect your house to have a valuation that’s in a similar range to those nearby. It’s highly recommended that you look at recent data regarding average selling prices in your neighborhood. Using this data, you should get a rough idea about what the average house is selling for, using this data point as a benchmark for the value of your own home.
When looking into the home sales data in your neighborhood, make sure to gather as much data as possible within a recent time frame. Do not investigate statistics from many years ago as it may be irrelevant to today, such as house prices during the global financial crisis. You must ensure that your valuation process uses recent, relevant, and high-quality data in order to get an accurate result.
Current Economic Conditions
The current state of the general economy, as well as the local economy, plays a large role in getting an accurate valuation on your home. As you may imagine, when the economy at large is facing a downturn, it is often reflected in housing markets throughout the country. House prices usually decrease steadily during economic downturns as the demand for real estate purchases decrease, and sellers start lowering prices in an effort to attract buyers. In the same manner, local economic factors also play a similar role in influencing the value of your home.
Thankfully, economic conditions fluctuate constantly. If you find that the current market situation leaves your home valued much lower than expected, you should simply wait until the market picks up again. Waiting for the right time to sell is common in the real estate market. Hence, don’t be worried if the current economic climate means that your home valuation isn’t as high as desired. You may be pleasantly surprised as market conditions improve in the future. Nonetheless, always take into account the critical influence the economy has to play in placing a value on your home.
Property Age and History
The age of your home is yet another important predictor of value. In general, older homes are less valuable than newer homes. However, sometimes the opposite may be true. Homes that have unique histories or historic designs that are well-maintained may receive higher valuations than more modern homes nearby. If your home is relatively old, you should look into any standout features of your home that may separate it from other homes in the area of the same age.
All in all, if your home is older than the average found in your neighborhood, you should expect it to be valued lower than average. Real estate investors and home buyers tend to favor newer establishments as the investment return prospects, especially when it comes to mitigating unexpected repair costs, are much more favorable with recent developments.
Home General Condition
A very large factor that may improve your home valuation dramatically or decrease it significantly is the condition of your home. If your home is currently unmaintained and features a range of issues such as faulty electrical facilities, there will be a considerable decrease in potential valuation. Home buyers and investors are not looking for properties that may provide them with low returns and hassles regarding repairs and maintenance.
On the flip side, if your home is in prime condition with all amenities and features maintained, you should expect a stellar valuation. Homes that are in excellent condition also attract investors looking to rent out properties, as it means they can lease the home to a tenant as quickly as possible without conducting renovations and repairs.
Putting Everything Together
If you consider all of the factors explained above, you should reach an accurate and reliable valuation for your home. Don’t ignore any of these factors as each plays a pivotal role in how much the market is willing to pay for your home. Your valuation should place greater weighting on your neighborhood as well as the general condition of your home over general market conditions. Although all elements discussed are essential, the most influential are these two specific influences.
Once you’ve reached a valuation of your home using the above principles, you should have a firm idea about where you stand in the current market. Using an accurate valuation of your home, you can conduct precise financial planning strategies as well as potentially sell your home at a competitive price.