In a market where we are seeing the price of homes sky rocket, many people wonder what gives a property its value. There are many factors that go into the dollar amount a home is worth when an appraiser is completing their inspection.
One of the key takeaways is to know there are specific scales that are followed to decide where a home ranks in comparison to others. When an appraisal is done on a home it is matched with typically three other similar properties close by known as comparables.
Close by means the homes are within no more than a few miles of each other, in the same school district, and relatively similar layouts. An appraiser will go through each detail of the property and then give a comparison between the properties.
Now we need to understand what makes up this value. If you want to sell or are looking to buy then you need to know what is inspected.
Location
Everybody has heard somebody say, "location, location, location." When we talk about value of a home the location is very important. Depending on the school district and neighborhood a home is located then this can make the value of a home go up or down. If we take two homes that are identical and place them one road apart with different school districts those homes can vary in price by thousands of dollars.
Improvements
A home needs a nice manicure over time. Making improvements to a home can definitely increase the value of a home. That is why so many people completely gut their bathrooms or kitchens to make major improvements to the interior of a home. To learn more about the best improvements for your home check this out.
Condition
The condition of a home is a little misleading. We can have two homes that are in perfect condition, but one is still stuck in the '80s while the other is completely modern. The modern home in perfect condition is going to be worth more. Just know, it's common sense that if you maintain a well conditioned home then it is going to be of higher value.
Current Market
Some things are out of our control. For instance, the way the market is rolling. Currently, in 2021 we have seen the prices of homes jump up in value. Whereas just two years ago the prices of homes were much less. How long will this market last? We can't say for certain, but it is likely to see homes keep their value for at least a little while. There are many factors that play into the market as well.
Time On Market
While a house sits for sale that can directly effect the value of the home. The price will most likely drop the longer it sits on the market because nobody is willing to pay the asked for price. Typically, we will see a home drop in price more then one time if it just sits out there with no takers. Sometimes it isn't that the price is outrageous, but it can be a mix of things. Those things include all of the factors above.
What You Need To Know?
When you go to get a home and want to get the most accurate value possible then you need a great appraiser. Direct Lenders, LLC is one of the only lenders that has repeat appraisers that are fantastic at their job. They are quick and accurate. We appreciate all they do.
Give us a call today at (877) 455-0440 and we can get you going in the right direction. We are always ready to serve our communities in any way we can and make sure we help you get the financing you need.