Factors impacting the valuation of houses
Factors impacting the valuation of houses –
The value that a house commands on the market depends upon a host of factors and circumstances. For anyone looking to list their house for resale it would be a good idea to consult a professional house appraiser. They would provide a fair assessment of the condition of the house in question and what sort of price it might fetch. Such a professional would look at a set of important factors to come to a certain conclusion. These would mainly include:
- The Bed/Bath Ratio– Homes with more bedrooms and bathrooms will as a rule sell at a higher price. There is however a correlation between the number of bedrooms and bathrooms for this factor to have a positive bearing on the final price.
- The Extent of the Living Space– The total legal square footage (sqft) determines the true price of a house. It is the total living area not so much the number of bedroom and bathrooms that play a deciding role in this. For instance a 1500 sqft three bedroom, two bathroom house will sell for less than a 2500 sqft three bedroom, two bathroom house.
- Housing location in mixed use neighborhood- Mixed neighborhoods house residences, offices and retail spaces in close proximity to one another, thereby leading to a much healthier lifestyle. Besides these also lead to a decrease in crime all of which combine to bring about an increase in the value of housing property.
- The impact of exterior composition on home prices–The type of building materials used in the construction of a house has a bearing not only on the cost of construction but also the price the property will command. The value of a house depends to a large extent on its exterior composition. While frame and siding houses are cheaper to build, versatile and safer in earth quake prone zones, brick houses last much longer, are environment friendly, cost less to insure and have much higher resale value. So depending upon one’s situation one could choose the right type of building material to obtain the optimum returns for one’s home.
- Design similarity or uniqueness–The design of a house is the outcome of both taste and functionality. Neighborhoods may be uniformly designed or exhibit considerable individuality of taste. It really is a toss- up between economic advantage and aesthetic appeal. Resale price will depend upon what the buyer is looking at.
- Maintenance- One may not judge a book by its cover but the salability of a house is definitely dependent on how good it looks. Maintenance of a house therefore is of crucial importance. Having a check list of what steps should be taken periodically to ensure that the house is in top shape is therefore a must. It also makes sense from the warranty rights and claims, as well as the investment perspectives.
- Impact of dated kitchens and obsolete bathrooms– A dated kitchen or obsolete bathrooms in the house considerably lower the selling price. People these days are used to and expect all the modern conveniences in their kitchens and bathroom and like them to be spacious and luxurious. Investing in modernizing the kitchen and bathrooms therefore is de rigueur and will substantially increase the value and selling price of the house.
- Garages- A garage can enhance the value of a house. Garages may not just be used to park cars, but also to store myriad pieces of equipment and gear. Investing in an impressive garage will definitely make a house more appealing and might fetch a higher overall price.
- Energy Efficient Homes- Energy efficient homes are much in vogue these days and there are many ways to create such a home. Improving insulation, using energy efficient doors and windows, efficient use of appliances, using energy efficient lighting and installing solar panels to reduce dependence upon the main power grid are some of the ways of achieving this.
- Curb appeal-First impressions matter. The curb appeal of a house therefore does considerably impact the price that a house commands. It in fact helps decide whether a buyer will even enter a house. Depending upon how impressive the curb appeal is the price could up by 7 to 14%.
- Basements- The jury is out on whether the presence of a basement adds value to a house or detracts from it. There is no straightforward answer to this with a host of factors determining the nature of the impact which varies from case to case.
Summary: A host of important factors and circumstances impact the resale price of a house. These include the bed/bath ratio, size of living space, location, exterior composition, design, uniqueness, maintenance, type of kitchen and bathrooms, garages, energy efficiency, curb appeal, presence of basement, et al.