Before you list your home for sale, you'll want to know how much it's worth. That way you can come up with a listing price that accurately reflects the market. Your home will eventually be officially appraised by a professional home appraiser, as lenders will want to know exactly how much the property is worth before they approve the buyer for a mortgage.
Your home's appraised value depends on several different factors. Find out what these are to help you establish what your home is worth in today's market.
The biggest factor that affects a home's appraisal is its location. When it comes to real estate, location matters a great deal. The same home in one neighbourhood can have a much different value than if it was located in a different community. Even the exact lot within a particular neighbourhood can make a difference.
For instance, a home on a quiet culdesac backing onto greenspace would be valued higher than a home in the same neighbourhood that's located on the corner of a busy street.
While the age of a home plays a role in its appraised value, whether it's more or less valuable will depend on several factors. Sometimes new homes are valued higher simply because of the modern innovations that they tend to have compared to older homes.
There are obvious perks to having a newer home, such as fewer issues to have to deal with and added comfort. However, older homes located in desirable historic areas that have been well maintained and are in good condition may also command a high appraisal.
An appraiser will look at the overall condition of a home when assigning a value to it. Obviously, the better the condition of the property, the better in terms of overall value. A home that requires a ton of TLC won't be valued as high as a similar home in the same location that's been meticulously maintained and has no issues with it.
Your home appraiser will evaluate the style and design of your home when coming up with a value for it. Certain styles are classic and timeless in nature and are never considered outdated. Others, however, may be considered trendy and will likely go out of style at some point in the near future. In this case, the home could be appraised at a lower when the decor is no longer in style.
For instance, if your home still features some outdated styles that were popular in the 1980s but are considered out-of-style today, the appraised value may reflect that.
Generally speaking, a larger home is often valued higher than a smaller home. That's because it takes more materials - and therefore more money - to construct a larger home with more square footage. In addition to the actual square footage, an appraiser will also look at how the space is actually used. If some of the space is not considered usable, that will be reflected in the appraisal report.
6. Number of Bedrooms and Bathrooms
The number of bedrooms and bathrooms in a home will also have an impact on the appraised value. Other homes in the area will be looked at and compared to the subject property. If your home has 4 bedrooms and 3 bathrooms, for instance, it will likely be appraised at a higher value compared to homes with only 2 bedrooms and 2 bathrooms.
7. Recent Renovations
Any recent renovations that have been done to a home will have an effect on the appraised value. Some renovations hold more value than others, such as kitchen renovations and bathroom remodels. Before taking on any remodeling projects, it would be in your best interests to speak with your real estate agent to find out which types of projects contribute more to the overall value of your home.
8. Current Market Conditions
The current real estate market in your area contributes a great deal to the value of your home. What your home may be valued at today could be significantly different than what it would be appraised at next year.
For instance, if demand is high and inventory is low, your home would be valued higher than if the opposite were true. Home appraisers always consider the current market when appraising homes.
The Bottom Line
If you're planning on selling soon, you want to do everything you can to maximize your sale price. While there may be certain components that are out of your control - such as the location of your home and the current market - there are other things you can do to boost the odds of selling for a higher price. Be sure to consult with your real estate team to prep your home appropriately to attract the most eyes and draw in the best offers possible. We are always happy to help if you have any questions.