Determining the true value of a home can be quite a complicated process. In addition to the local market, real estate agents must also consider the state of the economy as a whole, the size of the property, key features, upgrades, and a variety of other factors. Whether you have just recently begun looking at homes for sale or would like to improve the value of your current piece of property, here is a closer look at exactly how real estate valuation works.
Location and Local Market
Most homeowners realize that the location of their home and the state of the local market are the two biggest factors when it comes to the value of their property. Many real estate agents begin the process of determining the value of a residence by first looking at the value of nearby homes. A piece of property in the middle of a well-established neighborhood will be much more valuable than a similar home in a remote area. Changes to the value of nearby homes will also hit your home even if no other variables have been affected.
Rooms and Square Footage
The next few factors to look at are the total size of the property, the total living space, and the number of bedrooms. When taking a look at homes for sale, the first thing many buyers search for is a specific amount of bedrooms. A home with too few bedrooms is almost always impractical while a home with too many bedrooms could be out of their price range. A larger home with fewer bedrooms is often less valuable than a slightly smaller home with more bedrooms. This is why many specialists suggest upgrades such as turning an attic or basement into an additional bedroom.
Public Facilities and Sites
Practically every single business, park, arena, and school will affect the total value of your property. These locations are especially important if they are within walking distance of the home. As a general rule, a large store, park, good school, and arena will all increase the value of a home. Multiple stores, older parks, and run-down schools can reduce the value of a home.
Upgrades and General Upkeep
Any recent upgrades or additions that have been made to a home should increase its value. For those who are considering adding upgrades, it is important to look at the return on investment (ROI). Some upgrades have an ROI of 100 percent or more while others will add very little value compared to what they cost. Depending on where you live and the state of your home, some of the best upgrades include new HVAC systems, kitchen renovations, landscaping, new appliances, and a redesigned entryway.