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What Influences A Home's Selling Price?

By
Real Estate Agent with Transaction Alliance 513.520.5305 www.LizTour.com SAL.2002007747

When we're working with buyers and sellers one of the most critical parts of our job is understanding home values.  Getting it right for a home seller determines if they sell or don't sell.  For a buyer it's the difference between getting a bargain, overpaying, or just paying the going rate for a community.

So what influences a home's value?

We'd love to say it's as simple as plugging in a couple of numbers such as square footage, lot size, age of home, number of bedrooms, baths and garage spaces and out would come a number that would be accurate.  But it's not nearly that easy, otherwise the online home value estimates wouldn't need disclaimers of being within +/- 10% or 20%, which when you think about a $300,000 home, that's a range of $270,000-330,000 with the 10% margin of error.  That's quite the range isn't it??

But it's not really as simple as a few variables churning out a solid number and then the market adhering to that number.  Nope, there are MANY factors that figure into a home's value, and some of it is more art than science and math.

Admittedly a homes size and key features are the major drivers to a home's value.  A home that's 1300 square feet is going to need some really special circumstances to outprice a home that's 3900 sq ft.  But when you're dealing with homes approximately the same size and features, you can still get some significant variation.  Why is this so?

Housing availability at the time.  If four similar homes are for sale, there's not a driver to push a home price up.  If on the otherhand there's only ONE home for sale, supply and demand kicks in, especially if the home is in a high demand location. 

How badly a buyer wants a home.  There are times a buyer just has to have a home.  Come hell or high water, they're getting THAT home, and if they're a cash buyer normal limits may go POOF. 

Environment and home location.  A home next to a major road is going to have a different demand than a home backing up to a wooded greenspace in a quiet cul de sac.

Prestige.  Some subdivisions have a certain cachet that buyers want.  So the smallest home in that community might sell for more than the largest home in another community.  It's the "Cheers" effect, some buyers want everyone to know the name of the place they live.

And this is just scratching the surface on factors that can influence a home's price.  There are enough variables that an experienced agent is needed to interpret the situation.

 

Ready to talk Cincinnati real estate?  Call Bill of The Liz Spear Team of RE/MAX Elite at 513-520-5305 or email Liz@LizSpear.com.

Serving Cincinnati area home buyers and sellers,

Liz and Bill aka BLiz

 

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Serving Warren County Ohio & Adjacent Areas

The Liz Spear Team of Transaction Alliance
Elizabeth Spear, ABR, Ohio License SAL.2002007747

William (Bill) Spear, Ohio License SAL.2004011109  Kentucky 77938
Ask for us by name if you visit the office!

EHO
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Liz Direct: 513-265-3004     
Fax: 866-302-8418

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Comments (3)

Elyse Berman, PA
LoKation Real Estate - Boca Raton, FL
Boca Raton FL (561) 716-7824

So true Liz and Bill Spear .  I think the reasons you mentioned, especially housing availability at the time, is an important one.  If 4 others pop on the market at the same time, that's not a good thing for price.  Sellers need to understand this.

Sep 01, 2017 03:33 AM
Liz and Bill Spear

Supply and demand is a huge influence, and over the course of the year for a particular community it can vary tremendously.

Sep 01, 2017 04:59 PM
Jane Peters
Home Jane Realty - Los Angeles, CA
Los Angeles real estate concierge services

All very good points, Bill. And bottom line, a home is only worth what a buyer is willing to pay for it.

Sep 01, 2017 02:41 PM
Liz and Bill Spear

And some have more pocket change than others :)

Sep 01, 2017 05:00 PM
Lynnea Miller
Bend Premier Real Estate - Bend, OR
Premier Real Estate Service in Central Oregon

Good information, Liz and Bill Spear . The motivation of the buyer is a big one in residential sales. If a buyer has fallen in love with a house, they will sometimes do anything to get the home.

Sep 02, 2017 04:07 PM
Liz and Bill Spear

I've seen more than one case where a buyer paid much more than market rate to make sure they got a particular home.

Sep 03, 2017 08:09 PM