If your home is on the market for sale, you will understand how tough it is during this period to make a sale. Ever since the result of the EU referendum in June, the US property market has been erratic. While many lending institutions may have reduced their mortgage rates to balance the effect, -especially among first time buyers- there hasn’t been much sales activity.
Many experts have attributed this to the increased stringency for lending criteria by the Banks, to ensure borrowers can maintain their loans when the rates rise up again.
Is there a way to detect over-valuation? There are a few. As an example of locational impact, we can look right here in Austin, Texas. Russell Cavin of Uptown Realty stated, “Real estate values are a product of rents. If the values of condos around UT go up, then you’ll see rents for West Campus Apartments rise as well.” Traditionally this is how real estate values are driven. When you start to see a great divergence between rents and home values, you know the area may be experiencing a bubble. Real estate professional will use a formula called the Gross Monthly Rent Multiplier to compare rents over a historic period and look for patterns.
But besides liquidity, there are other factors that determine the attractiveness of a home for sale, they are:
This is perhaps the most important factor. People move for several reasons, new jobs, promotion, proximity to their children’s school, more tranquil environment and so on. The common thing about these reasons is ‘location’; location of the job, school and tranquillity respectively. The location of your home may be attractive (or not) depending on the location-preferences of the buyer.
Gentrification is a common term associated with property sales. The more urbanized an area becomes, the more attractive (expensive) the houses within the area become. If a buyer is seeking a more relaxed atmosphere to settle in, a house in a rural setting will be more valuable to them.
This works both ways. According to Brian Hong of CashTodayhomebuyer.com, based in San Antonio “Many people make the mistake of doing too much on their property. Too many upgrades can make your house less attractive.” Imagine having an antediluvian-styled home with a modern deluxe kitchen; buyers in the market for the former will immediately be put off. There are many ways to remodel a kitchen without interfering with the authenticity of the home design itself.
Home renovations can improve the value of your home when done properly. For instance, having a basement extension can increase its worth because of the additional space it creates, the trick is to avoid carrying out major upgrades right before you sell.
There is a belief that homes tend to get less valuable as they age, unfortunately, this is not true for everybody. Homes with a rich historical background are usually more valuable that those built much later. Especially if they were built in the early 1900s. There is one condition to this; the property must be in its original condition and well maintained.
Besides the age, the general outlook and conditions matter too. A dilapidated property will usually cost less in the market because of the amount of renovation it will require.
It is no surprise that unfortunate occurrences deplete the value of a home. Events like freak accidents, fires or violent murders can deter potential buyers thus affecting its asking price. In some places, the law states that realtors and estate agents are not compelled to disclose unsavory details of a property unless when asked. But these days, buyers are becoming more aware and will usually make inquiries about in-depth details of a property.
1: Bruno Girin – School Bus
2: Wargle WDE – Home Renovation
3: Dave Soldano – Victorian House in Manitou Springs CO
4: Mitchell Eubank – Home Crime Scene