Are there common factors that affect property value within a neighborhood? Do you ever wonder why similar homes for sale in Lane County have widely different asking prices? The answer is that many things go into the value of a home and it’s not unusual for houses in the same town to have different property values. Let’s take a look at what goes into property value.
Who decides the value of a property
Property values are determined, to a large extent, by homebuyers and certified residential appraisers. There’s an old saying in real estate that a house is worth what a buyer will pay for it and this is somewhat correct. A certified appraiser develops the actual real-time value of a property.
Lenders and homeowners hire certified residential appraisers to examine a home in detail. After the assessment, they report on the properties value. Here are common factors that affect property value.
Helpful Hint: Hire a local property appraiser who is familiar with the real estate market and economic conditions in your area. Experts suggest that you make sure your appraiser has experience evaluating homes that are no further than 10 miles from your property. A professional who knows the market in your community is much more likely to give your property an appropriate assessment while considering the common factors that affect property vlaue.
Location makes all the difference
Those of us who sell houses for a living know that location is a crucial factor in determining the value of a home. It’s true that the current market worth of a house depends in large part on its location. Buyer preference for some areas over others helps to explain why the actual location in Lane County has a lot to do with its market value.
Some of the location related things that impact the value of a property include
- Excellent schools
- Access to public transportation
- Minimal crime
- Proximity to shopping and entertainment
- Healthcare Options
- Lovely scenery (ex. Woods, water view)
A property that has these elements is typically in demand with buyers, resulting in firm market value. Indeed, location is such a critical factor in a home’s value that real estate agents encourage buyers to take it into account when buying a house. After all, you can change nearly anything about a property except its location.
The price that the property sold for in the past
Did you know that past sales prices for a property are often used to assess the current market value?That’s one of the major common factors that affect property vlaue. For instance, if the property sold a year ago for $220,000 real estate professionals might take that number as a baseline and then make price adjustments based on things like the condition of the property and current market conditions.
Of course, the historical sales price information for a given property isn’t helpful if the house hasn’t been on the market in years. When that’s the case, it makes much more sense to look at recent home sales in the area.
Recent sales in the neighborhood
Recent sales of comparable properties within a community is another factor that plays into the value of a particular property. For example, if a house on your block just sold for $300,000 and it has the same (1) square footage, (2) number of bedrooms and bathrooms, and (3) approximate lot size as your home, you can bet that a starting point in valuing your property is near $300,000.
Appraisers generally prefer to use the data from multiple recent sales as comparables since it’s possible for the sales price of a single home not to reflect the market accurately. For example, a house that needs costly repairs might sell for significantly less than similar houses in good condition in the neighborhood.
The condition of the property
There’s no denying that a run-down property is worth less than a comparable property that is in excellent condition. A skilled residential appraiser looks beyond the interior decoration of a home to see if the bones of the house are in order. A typical appraisal report notes the condition of
- HVAC system
Help your home make a great impression
From a homeowner’s perspective, the fact that the condition of the property influences the property value is an exciting opportunity to build equity by helping your home to make a welcoming impression on the appraiser. Here are some simple tips on preparing for a visit from the appraiser.
- Clean until you can’t clean anymore
- Mow the grass and trim the bushes
- Replace any hard to work door hardware
- Check smoke detectors
- Make sure that the HVAC system is clean and operating
- Repair any plumbing leaks
- Test the outdoor sprinkler system
- Fix faulty electrical outlets and change light bulbs as needed
- Repair broken appliances
Along with making sure that your home is in presentable condition, consider putting together a handout that highlights (1) recent comparable sales, (2) benefits of the community, and (3) upcoming developments in the area that might increase property values. For instance, don’t forget to let the appraiser know if the LTD is planning a new transit station a few blocks from your house.
Many of the tricks that home stagers use to market a home also help to impress both buyers and an appraiser. Check out my earlier article on home staging for some easy techniques that will make your home stand out from the competition.
Last thoughts on common factors that affect property value
Lastly, when you’re thinking about buying and selling properties in Lane County, it’s important to remember that home values depend on much more than fancy kitchens, spa-like bathrooms, and hardwood floors. Indeed, the quality of the house contributes to its value. However, common factors like location, sales history, and recent comparable sales are also used to come up with the current value of a home.
Although you can’t control many of the common factors that affect property value, it is possible to raise the sales price of your house by preparing it to make a favorable impression on visitors.
Contact me at firstname.lastname@example.org for help with all of your Lane County housing needs