What is my home worth? This is a question that homeowners ask all over the world every day. Whenever a homeowner asks me what their property is worth, I will only consider one type value and that is current market value. Current market value, in its simplest definition, is what the home should sell for under the current market conditions, if marketed properly. There are two types of conditions that have the largest impact on the market value of a home, those conditions that we can control and those that we cannot.
Here are the three most important conditions to the current market value of your home that you cannot affect.
#1: Location
Location is potentially the most vital factor when it come to determining the value of your home and one that is out of your control. The location is where it is and there is nothing that can be done to move the property.
#2: Competition
The market value of your home will be impacted by comparable homes on the market in the area. Buyers will compare your home to the competition and see how it measures up. In a competitive housing market there will be competition, but as a homeowner you cannot control what homes are and are not on the market.
#3: The Market
The market for homes is always changing and adapting. There is historically an ebb and flow to the market. The market value of your home is dependent on the demand for properly priced homes. If there is more demand for homes than properties on the market, then the market value of your home will go up. If the market is flooded with inventory and demand cannot match, then your current market value will go down. There are many factors that affect the market (inventory, economic conditions, interest rates, etc.) and all of them are outside of your control.
As a homeowner wanting to understand the current market value of your home, it is important to understand the impact that location, competition, and the market can have on your home’s value, but the two most important conditions are the ones that you can control.
#4: Condition
As the homeowner, you are the one that has control over the condition and quality of the product. The appearance of your home is massively important in that the first impression that your home gives could be the only impression that the buyer remembers. If buyers pull up to the front of your home and see that the yard is nicely manicured and your home has good curb appeal, they will walk into your home with a positive feeling. By presenting your home to the market in the best possible condition, you will most likely increase the sale price and decrease the time on the market.
#5: Price
Accurately pricing your home is best possible way to ensure that your home will get the attention from the market that it deserves. The most common mistake that we see is when a homeowner want to push the market too far and list their home for a higher price the comparable sales would justify. A home that is overpriced will not be viewed as often and will not receive the necessary exposure to achieve the highest possible sales price. Buyers and their agents are smart. They will see the competition and they will know what an appropriate price for the home is. If you price your home correctly, you will receive more views from agents and buyers and that activity will generate more offers. You are more likely to achieve the highest possible price for your home if you are able to generate a competitive buying environment.
