Whether you're a buyer or a seller, you'll want to know exactly what adds value to a home and what detracts from it. Understanding what these factors are can help sellers price their home appropriately and take measures to improve its perceived value to buyers. As for buyers, knowing what these components are can help make a better and more informed purchasing decision.
Many of the factors that can bring down the value of a home can be found both inside the house as well as in the neighbourhood itself. It's important to understand how such factors can impact the long-term value of real estate.
1. Proximity to Hydro Towers
Every home needs electricity. But how close a home is situated relative to a hydro tower and power lines can make a big difference in the perceived value of the property. The closer the home is to one of these towers, the further down the value may go.
Not only are hydro towers visually unappealing, they're also considered to be a health hazard as well. There is a stigma attached to hydro towers: exposure to any electromagnetic waves that are emitted from such components are thought to have negative effects on health. While such a theory doesn't hold much scientific weight, the perception still stands.
2. Proximity to Train Tracks
For obvious reasons, a home that is located very close to railway lines will likely be valued less than the same home on a more desirable lot. The reason is simple: the closer you are to train tracks, the noisier it will be. Not only will it be loud during the day as trains pass, it can also be very noisy and distracting at night when you're trying to sleep. Being very close to tracks can also be seen as a potentially dangerous situation, especially with small children and pets involved.
3. Bad Neighbours
Believe it or not, but the family living next door to you can actually have an impact on your home's overall value. Whether your neighbours are loud, obnoxious, rude, messy, or don't take care of their properties, how they behave can have an effect on the value of your home. After all, buyers won't want to live next door to a family that's going to impede on their enjoyment of their home.
4. Poor School District
Families with kids go out of their way to relocate to homes that are located in a good school district. They're also willing to fork over more money in order to make that happen. But the opposite is also true: buyers may try to avoid purchasing a home that's located in a school district that's not considered high, and will typically not pay a premium that they would compared to a home that's located in a highly sought-after school district.
5. Lots of For Sale Signs and Vacant Storefronts
If people in the area are moving out by the hoards, that's a bad sign that the neighbourhood is on its way down. If a home is located on a block that's got quite a few For Sale signs and stores that are vacant and boarded up, that won't do much to the value of the property.
6. Unconventional Design Elements
If a home is decorated or designed in such a way that it is completely not in line with what the neighbourhood calls for, the home's value could suffer. The colour of the home also plays a role in its perceived value, as flashy hues on the walls can throw off buyers. Anything that dates a home and makes it stick out like a sore thumb won't add any value, but rather take away from it.
Even something as simple as clutter can detract from the appeal of a home. And if buyers are turned off by clutter, the value of the home can be affected. Buyers are often unable to see past obstacles that get in the way of the aesthetics of a home, which makes it more difficult for them to develop an emotional attachment to it.
The Bottom Line
While there are certain things that are out of homeowners' control when it comes to value - such as its location - there are other things that can be done to offset these challenges.
If you're a seller, your best bet when it comes to showcasing your home in the best light is to tidy up, neutralize your decor, depersonalize the space, and allow a professional home stager come in and prep your home for the market. By setting up your home in the best light possible, you can add value to it and encourage buyers to bring in decent offers.
If you're a buyer, you may want to keep an eye out for specific things that can affect the value of a property in order to set your offer price appropriately or even walk away from a home altogether. Either way, you'll want to be sure to team up with a real estate agent who can guide you through the process to make sure the biggest investment you ever make is a wise one.
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