If you’ve been thinking that right now is the time to at least find out what your home is worth on today’s market, you’re making a good decision. Even if you decide right now isn’t the time to sell, there’s still a lot you can do with your home once you know exactly how much it would go for.
That being said, your home’s value isn’t completely out of your control; you can affect your current valuation and create some extra space in your bottom line. However, there are also factors at play that you’ve got no say in.
In this blog, we’re going to look at the three most important things homeowners have control over when it comes to the value of their home, as well as the four most important things that affect your property’s value that you can’t control whatsoever.
3 Factors You Can Control
As a homeowner, you have a lot of sway over what the ultimate value of your home is on the open market today. Here are three important things the Brick & Corbett team look for when pricing a home:
- Home Maintenance
One of the biggest transitions between being a renter and being a homeowner is the responsibility of home maintenance. Everything from furnace filters, dehumidifiers in the right place, and monitoring of the roof for performance issues, there is regular maintenance that is a part of owning real estate.
If you’re a conscious, active homeowner who has kept up on their responsibilities, or better yet, has also kept records of all the work you’ve done, you’re likely to get a higher sale price for your property because you can confidently hand over paperwork that will demonstrate your home is in good shape. On the other hand, if there are signs of neglect and no record of work done, many home buyers will be suspicious of the home’s condition, netting you an ultimately lower price.
- Undesirable Finishes
We know, beauty is ultimately in the eye of the beholder, but there are some home finishes that, at this point, just need to go (and can be remedied fairly easily and inexpensively). Things like carpet in the bathroom, appliances that are 20+ years old, or cheap wood paneling from the 1970s are shortcuts to a lower sticker and ultimately sale price.
Though there may be some sweat involved, many of these projects can be taken on by the homeowner themself, often for less than $2,000, resulting in a net positive in terms of overall value.
- Obviously Needed Repairs
It’s easy to think that, in a market like the one we’re seeing right now, a property is going to sell in just about any condition, but this is actually wrong. Even though we’re seeing historic demand from buyers right now, many are shy on pulling the trigger on a home that will present a major challenge the moment they get the keys.
Things like a leaky roof, water in the basement, damaged or non-functional electrical, or bad windows are red flags for buyers, and unfortunately, can be costly fixes for sellers.
However, that doesn’t mean that if something like this is going on in your home that you’re completely out of luck. Just having a plan in place (like a post-closing credit) to address the issue and present a solution is often enough to get your home valuation back up to a range you’ll be excited about.
4 Factors You Can’t Control
No matter how hard we try, there are always going to be things homeowners can’t control when it comes to establishing the market value of their home. Here are the top four:
- Comparable Sales
A comparable sale, or “comp”, is a demonstration of what the market will bear for a home similar to yours. Unless you live in a condo or in a major metro area, it’s difficult to find an exact comp to your home, which means Realtors often look for homes that are close enough that reasonable adjustments can be made to understand the current market value.
This means that, if a home a couple of miles from your home sells for a certain price, and your home is similar to that one, you’re likely to see some influence over your price. On the Brick & Corbett team, we know that this is just one factor in your pricing strategy, but it’s one that homeowners have no control over.
- Market Conditions
The balance between market supply and demand is always going to affect the price of goods, and specifically in this case, the price of homes. Right now, we’re experiencing a major inventory shortage, meaning there aren’t enough homes to meet buyer demand, which is driving prices up significantly across our region.
However, it’s important to keep in mind that these sorts of conditions do change, sometimes quickly. For instance, if the Fed announced interest rates were likely to remain at their near-historic lows for the foreseeable future, it follows that buyer demand would remain high. If they announced that interest rates were going to rise, we’d likely see buyer demand drop as money becomes more expensive to borrow.
This highlights the fact that market valuations are temporary snapshots of a home’s position in a greater landscape, and just how valuable it is to strike (either with a sale, a refinance, or something else) while the iron is hot.
- Micro-Market Activity
A micro-market is the area directly surrounding your home. In Northern Michigan, we think of this as our neighborhood or subdivision. Activity in this very local area can have an outsized effect on a home’s price because these conditions are essentially an extension of your home’s amenities.
For instance, say you live in a subdivision on the Old Mission Peninsula with a shared neighborhood beach. The last couple of years have been challenging in terms of the water levels in Lake Michigan, likely resulting in much of your beachfront being inaccessible. This change will certainly affect your home’s value, even if that change is temporary.
- Home Layout / Architecture
As does go the way of fashion, trends in what is popular in terms of architecture and home layout change. This means that what was popular and trendy 10 years ago may not be as desirable, and may affect your home’s value.
This factor is a little less effective right now when demand is so high, but it does still exist and is important to consider, especially if your home happens to be a style like mid-century modern or other open concept iteration that is very popular right now.
The Bottom Line
There are lots of things that go into determining how much your home is worth on today’s market. The Brick & Corbett team works really hard to make sure every home valuation we do is personalized, professional, and takes into account every single factor that affects a property’s real-time value.
To learn more about our process and to request your very own personalized home valuation, click below to get started.