There are some things that affect the value of a home and some things that do not. Here is a list of some of the things that do have an impact on value:
1. Location - The very same home in one neighborhood will have a different value in another neighborhood. Even which block a home is on has an impact on the value.
2. Condition - The condition a home is in has a huge impact on the value. Buyers will sometimes off thousands less for a few hundred dollars in needed repairs. They don't always understand that cost of repairs so it isn't unusual for them to offer $5000 less when the home needs a repair or udate that costs $1000.
3. Size - When appraisers or Realtors put a value on a home we use the square feet of finished living space. Not all space is equal. Finished square footage in a basement with no egress windows does not have the same value as finished square footage on the main floor.
4. Amenities - the number of bedrooms, baths and garage stalls.
The four I listed are the basics. Here are some things that do not impact the value of a home:
1. How much the last owner paid for it.
2. The value as listed in Zillow or in the tax records. Although I do have a theory about Zillow. As the site got started and gained traffic home values went down nation wide. It is just a consicidence but it would be nice to have just one person or company to blame for declining home values.
3. How much the current owner owes on it.
4. The cost of repairs made to the home. When it comes to big ticked items like roofs, the sad truth is every home needs a roof and buyers expect one. Putting on a new roof if one is needed will help sellers get the most for their home.
5. The value of the home in 2005, or even last year.
It gets a little tricks with improvements. Lets say there is a $100,000 dollar home in a neighborhood where the average price is 100K and the owner puts in a 50K kitchen. In most cases that does not make the home worth $150K. It will increase the value/desirability of the home but there isn't always a direct dollar for dollar relationship.
1. Location - The very same home in one neighborhood will have a different value in another neighborhood. Even which block a home is on has an impact on the value.
2. Condition - The condition a home is in has a huge impact on the value. Buyers will sometimes off thousands less for a few hundred dollars in needed repairs. They don't always understand that cost of repairs so it isn't unusual for them to offer $5000 less when the home needs a repair or udate that costs $1000.
3. Size - When appraisers or Realtors put a value on a home we use the square feet of finished living space. Not all space is equal. Finished square footage in a basement with no egress windows does not have the same value as finished square footage on the main floor.
4. Amenities - the number of bedrooms, baths and garage stalls.
The four I listed are the basics. Here are some things that do not impact the value of a home:
1. How much the last owner paid for it.
2. The value as listed in Zillow or in the tax records. Although I do have a theory about Zillow. As the site got started and gained traffic home values went down nation wide. It is just a consicidence but it would be nice to have just one person or company to blame for declining home values.
3. How much the current owner owes on it.
4. The cost of repairs made to the home. When it comes to big ticked items like roofs, the sad truth is every home needs a roof and buyers expect one. Putting on a new roof if one is needed will help sellers get the most for their home.
5. The value of the home in 2005, or even last year.
It gets a little tricks with improvements. Lets say there is a $100,000 dollar home in a neighborhood where the average price is 100K and the owner puts in a 50K kitchen. In most cases that does not make the home worth $150K. It will increase the value/desirability of the home but there isn't always a direct dollar for dollar relationship.
Sellers can price a home at any level they want to but if it is priced too high often buyers will ignore it. Buyers in our current Oregon market want the perfect home at the perfect price -- and they can ask for it. As of January Portland has 19.2 months of inventory to sell (last month we were at 15 months and the month before at 10 months). This is a lot of homes to sell and anything over six months of inventory directs the market to a "Buyers Market".
Appraisers are being very conservative these days which means that the home may not appraise for the agreeded sales price between thebuyer and seller. When that happens some times the buyer can not borrow enough money to buy the home.
Pricing a home is more of an art than a science. In general we look for three comparable homes that have been sold in the area in the last six months.
The amount of money that a seller can get for a home or the amount that a buyer will pay is also affected by a basic economic principal. Supply and demand. Currently there is a demand in for forclosure and short sale homes - a great price is leading the marekt. Last year at this time we saw buyer purchasing in the mid-$300k price point and had 32.5% more sales closing.
When all is said and done a home is worth exactly how much someone will pay for it. Buyers drive prices, not sellers or their Realtors.
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