While homeowners are aware of what they paid for their property, the value of a home can change over time. When selling a home, it is important to know the current value. The value of a home can be determined by several different factors, including:
The sale prices of homes similar to yours can help determine the value of your own home. Referred to as “comps,” these are homes in your neighborhood that can be used as a comparison based on how recent they were sold, similar features to your home, its distance from your home, and its location.
The Location of the Home
The convenience of a home can determine its price. When appraisers determine the value of a home, they look into primary indicators based on its location. This includes:
- The quality of local schools
- Employment opportunities
- Proximity to shopping, entertainment, and recreational centers
The distance a house is from highways, utility lines, and public transportation can also impact the value of a home.
The size of a house can factor into its value. Price is roughly estimated per square foot. This takes usable space into consideration, including bedrooms and bathrooms. These spaces are more highly valued, unlike a garage, attic, or unfinished basement.
Age and Condition
A home’s condition plays a part in its value. Usually, newer homes are appraised at a higher value. Houses that are likely to break down can become costly for a buyer. This is why inspections take place during the buying process.
Upgraded or updated homes can have a higher value, especially if the home was previously outdated. This can include adding extensions, pools, wood floors, remodels, etc.
The Local Market
The number of properties that are for sale in the neighborhood can impact a house’s value. This is due to competition, which can lead to price adjustments in order to attract more offers.
A large factor in determining a home’s value is supply vs. demand. The economy often impacts a person’s ability to buy or sell a home. The housing market can struggle when the economy is slow. It is because of this that it is important to watch home sales and price appreciation in your area.
Interest rates, both short-term and long-term, can affect a person’s ability to afford a home. When interest rates rise, fewer people may be able to buy a home. This can impact how much a home can be sold for.
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