To Much or Not Enough

You have probably heard many people talking about pricing a home correctly so that it will sell. Especially in buyer’s markets, right? So what does determine what a home is worth? I recently ran across an article while perusing the Los Angeles Times online that does a good job comparing the different factors that go into determining how much a home is worth. I would recommend this article written by Michelle Hoffman, entitled “No magic formula”, to anyone who is currently thinking about selling his or her home. Mostly because it does a good job of highlighting that pricing a home is not an exact science and that there are numerous variables that can affect the real world value of a home. The rule used to be location, and largely it still is, however, there are many other factors many folks do not know about that dictate what the actual value of a given house is. First-time homebuyers can also benefit from this piece by learning what determines the market value of homes. According to this article, the answer to how much a home is worth depends on many different things including, “location, the cost of land, construction costs, quality, regional features and the home’s amenities and condition.” As well as regional features, the actual home’s features, or lack thereof can add or detract from value, which is why any two homes in the same area can sell for very different sums. This is why it is a good idea to have your listing agent provide you with a comparative market analysis of your area. Other factors that will raise or lower your home’s value include upgrades such as remodeling, how energy efficient the particular home is and of course, market conditions. In short it is not just location or the values of nearby homes that ultimately determine the value of a home. Each home is a unique offer with its own features. My advice to home sellers is, prepare your house well before you place it on the market, make it stand out from other offers in your neighborhood and you will attract more interested buyers. Then find the right listing agent, the one who will do the proper research, marketing and advertising to sell your home. Alan Mooney, president of Criterium Engineers, an engineering firm that inspects over 25,000 buildings per year, offers some excellent advice in this article for buyers regarding location and value, “Buy a home because you like it, you want to live there, and you’re OK if the market goes up, and you’re OK if the market goes down.”