For the most part, the home-buying process also tends to include the sale of another property – although not always if you are going from renting to buying. Regardless of your personal circumstances, when it comes to buying or selling a home, the price is obviously often the dealbreaker. Sometimes, it can seem as though you are expected to pay over the odds for a subpar property. There are various factors, all of which often affect the value of the property. Read on to learn more.
The Location of the Home
One of the biggest factors that can affect the value of a property is simply where it is located. Some areas are more expensive than others; it is as simple as that. There are a number of reasons as to why one area is more expensive than another. Sought-after areas located within city limits can be more expensive, as can suburban areas with great amenities. Homes in a good school district often cost more. Down-and-out areas or areas rife with poverty or other socioeconomic issues are often far cheaper, which is what leads to gentrification. The local weather and climate can also affect property prices too. Some real estate agents have their listings online, like EZ Home Search, which has an ‘investigate this area’ feature which can be useful for potential buyers.
The housing market itself also has a lot of sway in how much a home is going to be worth. In the end, it comes down to supply and demand. The demand for properties versus who is selling what has a huge influence on the house prices you can expect. A fixed supply of homes means higher prices, and a wealth of homes on the market means more choice and, often, lower prices. Simply put, when the demand exceeds the supply, the price of the property increases and vice versa. That being said, the housing market itself does tend to be pretty stable, only experiencing fluctuations as opposed to catastrophic events.
Market conditions encompass several different factors. The interest rates offered by lenders are part and parcel of the housing market. It is a symbiotic relationship. Interest rates also play a huge part in the value of a property. If interest rates are increased by the Reserve Bank, then all lenders will also raise their interest levels meaning that borrowers then have higher repayments. Higher repayments then mean more expensive mortgages and properties are sold at a higher price. However, the reverse is also true. If interest rates decrease, then you can also expect to see lower house prices too.
The Square-Footage, Layout & Useable Space
Another factor which plays an important role in the value of a property is simply the size of the property itself. A lot of home listings include the price per square foot. For the most part, the bigger the home, the more expensive you can expect it to be, although this is also contingent on the other factors. In addition to the size of the property, the amount of usable space is also important. A property can be big, but if the layout is off and the amount of actual useable space is limited, then the price of the property will reflect that. There are rooms within the home that tend to play more of a role in the value of a property, like a kitchen, bedrooms, and bathrooms. Additions to the home like the attic space, the basement and the garage are not often included in the useable space evaluation because they aren’t necessarily livable spaces which does limit their use.
The Age and Condition of the Property
A large, spacious home is one thing; however, if it is crumbling around your ears, then the value of the property will plummet. An older property is not always going to be cheaper; if it is in good condition and has been looked after and well maintained, then its value will hold steady. Newer builds are often more expensive because they are thought to have fewer issues, but this is not always the case. The amount of cowboy builders are on the rise. The condition has a lot to do with the value of a property. Buyers do not want to purchase a brand-new property that requires major renovation or building work right off the bat. In the end, it comes down to how easy it would be to move into the property and live in it as is.
The Need for Renovations, Upgrades or Updates
As mentioned above, the age and the condition of the property speak to its livability, which in turn translates into the worth of the home. A property which requires renovating, upgrading or updates will be cheaper. On the other hand, a property which has already been renovated or is on the receiving end of upgrades or updates is often going to be worth more. An older home is often outdated in the décor and fixtures, and fittings; this is why people buy them at a cheaper price, renovate them and then make a profit when it comes to selling them on. Any renovation that increases the overall living space, too like an attic or basement conversion, will also increase the value of the property. It comes down to curb appeal.
If a property is fine on all fronts. Then the potential for renovation can also serve to increase the price of a property. If the home is set up in such a way that renovations or additions are going to be easier than they would otherwise, and the home has more renovation potential, then it is likely to sell for a higher price. A lot of buyers today are looking for fixer-uppers. They choose to go for a cheaper property that they can then renovate and customize to their needs. This is why when it comes to shop fitouts then try considering trusted or legit fitout businesses.c
The Ease of Securing Planning Permissions
Any sort of building work to be carried out, whether it is on an empty lot or as an extensive renovation on an existing property, will require planning permission or building regulation in one form or another. Failing to secure these permissions beforehand can result in the property or the addition to be demolished and torn down. There are several factors which will affect whether or not your application would be approved. Some areas simply have stricter criteria that need hitting, or there is a blanket ban for one reason or another. The ease of securing the building regulations can have an impact on property values.
The Bottom Line
Obviously, working out whether or not the property that you want to buy or sell is going to do so for the best possible price is important to ensure that you aren’t overpaying or being undercut. There are several things that can affect the price of a property, and you will need to be aware of these factors. Personal preference does still stand for a lot. If you like the property enough and there are no structural issues or any other things that would affect your comfort or safety, then whatever price you pay for the property might be worth it. It all depends on your perspective and what you are looking for in a property, too, so bear that in mind.