When homeowners sell their homes, they want to receive the most value. It’s up to you to help them understand what elements go into deciding these numbers — and what they can do to increase them. The factors that affect house prices can be overwhelming to some, so it’s vital to walk sellers through the process. When people feel confident and informed about their homes, they will have an easier time moving them off the market.
As an agent, understanding these elements will help you create listings that increase a home’s marketability. You can gain more satisfied clients and earn higher revenue from learning the ins and outs of what makes a residence worth buying. Step into the buyer’s shoes and consider a few things they tend to look for.
Factors That Influence Home Value
What are some crucial home resale value factors? Each one holds weight, but location sits at the top of the list.
Location, location, location. A home’s neighborhood, district or city can make it or break it. Buyers like being close to their workplaces and their children’s schools because it reduces the need for long commutes. They save more money, and they feel less stressed about rushing to a job a few streets over rather than across the city.
Entertainment and necessities matter, too. Can they go to a movie theater or the mall on a slow Saturday? Are there healthy grocery stores or farmers’ markets within reach? Though the specific amenities are different for everyone, most people want a location that makes their lives easier.
Cities tend to have all the comforts people want and more. Their busy quality and accessibility make them favorable spots for individuals who desire to be in the middle of the action. According to Zillow, 33% of the homes real estate agents sell are in urban areas. Numerous forms of public transportation appeal to those without cars. Entertainment is never too far away, and many types are both educational and free.
However, the downsides include higher mortgages, frequent traffic and a lack of quiet. When selling a city home, you may be more successful appealing to singles and couples without a lot of responsibilities — like dependents — or debt.
It’s not unusual for suburban homes to be bigger than those in the city, due to the increased space for building. These houses also trend on the cheaper side, whereas many buyers would shell out more for a smaller city home. However, cities offer benefits a potential homeowner may not expect when compared to the suburbs.
If cost is a major factor for buyers — which it ordinarily is — they may be better off in the city. Health care, entertainment and groceries typically cost more in the suburbs. The cost of living also depends on other factors, though. A four-person family may find it more expensive to live in the city. But even with the suburbs’ higher costs, it becomes clear that many people prefer it — 51% of new homes sell here.
On average, rural homes tend to stay on the housing market two months longer than those in metropolitan or suburban areas. You’ll need to help rural clients focus on marketing strategies that set their home apart from other abodes, while playing up the appeal of an out-of-the-way residence.
People often move into rural areas when they’re looking for a major change in their lives. It’s a stark transformation to go from convenience stores and fast food to driving an hour to the nearest grocery store. Engage that desire for change, and help buyers understand how a rural lifestyle can be advantageous.
Of course, the conditions of the house itself are the second most vital element. Does the home have features that would appeal to local buyers? Is it well-kept? What’s marketable to buyers will ultimately depend on your specific region, which is why it’s essential to follow housing trends.
Preferences in size vary widely, but many in the real estate industry will agree that larger homes generally have higher values. The price per square foot plays a role in estimating a home’s value, too. Paying $200 per square foot for a house may be reasonable to residents in one region and extreme to individuals in another. You must also consider how much livable space there is within the total square footage — areas like bedrooms and sitting rooms.
High-value homes grow alongside homeowners as necessary, whether a whole family or a single person lives there. People want the ability to make improvements and add features, rather than searching for an entirely new space. Whether the home is large or small, its value may increase if it can accommodate add-ons like extra rooms or a deck.
A home’s age can pose safety hazards. Building materials that were common in older houses are no longer commonplace in contemporary abodes. You’d be hard-pressed to find aluminum wiring, lead paint or asbestos insulation in a place built within the last decade. However, homes from yesteryear may still have hazardous or unappealing features, which makes it harder to move them off the market.
You can work with your client on upgrading or replacing outdated systems. Keep in mind that an older residence isn’t an inherently bad thing. An old house located in a historic district can have significance for buyers. Plus, aging can offer an attractive vintage appearance, as long as these effects don’t veer into the wear-and-tear category.
Bedrooms and Bathrooms
The more bedrooms and bathrooms, the better. NAR’s Home Buyers and Sellers Generational Trends report showed an overarching preference among buyers for homes with at least two bedrooms. The number of all buyers who purchased a home with one bedroom was less than 1%. In contrast, 85% of everyone surveyed bought a house with three or more bedrooms. Interestingly, two full bathrooms were preferable to three or more.
Many people want to live in or near city centers, but this desire brings one major question — what is the parking like? There’s an average of 1.88 vehicles per household in the United States. Many homes have two or more cars. If people have to struggle to find space for their automobiles, they’ll be less likely to move into a particular city or residence.
If your client’s home has a garage — or multiple — it’s safe to say their property value increases. However, not all parking is equal. One house may only have a driveway, while another property in a city center requires tandem parking. You’ll also have to consider if the parking spot is on the same deed as the home itself — or whether the garage is sizable enough to fit a range of cars. Home resale value factors are never black and white.
The home’s exterior is the first thing buyers see. If it’s not up to their standards, expect to get fewer takers. Everyone’s preferences are different, but you can assume that most individuals like a home with beautiful landscaping, a decent size and regular maintenance. Even older, well-maintained homes can sell for a higher price.
Each aspect of the house matters, but remember to view its appearance as a whole picture. Does it look like a safe, attractive place to live, or does it need significant improvements? Are those transformations feasible for the house itself? How much value will they add regarding aesthetic appeal and monetary cost?
Now that you’ve factored in location and home features, what about timing? Even if your client has the perfect home in the ideal location, it may not sell for as much as expected if the timing is wrong. Here are a few time-based factors affecting the value of residential properties.
Time of Year
The time of year has a significant impact on a home’s marketability. You want photos of your client’s house when skies are clear and the lawn is lush, but that’s hard to accomplish in the winter. Similarly, you may see a decline in buyers in chilly months — not everyone wants to venture out into the cold to view homes. In contrast, one survey showed that people who sold in the warmer months experienced an average premium of 9.2% in June.
However, it’s not impossible to sell houses in winter if you follow some skillful advice. Additionally, you can use virtual staging services from Real Estate Exposure to show a house without trekking through mountains of snow. Be innovative with your techniques and bring your client’s home to the buyers.
Supply and Demand
If a homeowner tries to sell their home at a time when several others in their neighborhood are on the market, they have a lower chance of matching the price they want. Like with any commodity, costs fall if supply is higher than demand. If there are little to no competitors, and the client’s home has many desirable qualities, expect higher demand.
Your client may want to increase the price if supply is low and buyers are scrambling for available housing, but remind them that realistic pricing is crucial. Higher-priced homes will take longer to move off the market. A quick sale may not be in the cards if they ask for too much money.
Interest Rates and Economic Factors
Mortgages increase as interest rates rise, which can deter potential buyers. When it comes to any kind of purchase — especially big-ticket ones — people generally don’t want to pay more than what’s necessary. If they recognize a potential hit to their bank account, they’ll steer clear of buying until the time is right.
On the flip side, people may be willing to spend more on a home if their wages increase. Wage raises typically occur when the economy sees a boost. More consumers can afford to buy, which raises housing demand. Pay close attention to economic fluctuations, and be aware of how buying patterns change with interest rates.
What You Can Do to Make Sure Your Client Receives Top Dollar
You know the factors that affect house prices — now, how can you use that knowledge to increase your clients’ chances of market success? Keep reading for a few tips on increasing home value.
Make Sure the Home Is Attractive
If anything needs fixing or upgrading, whether small or large, now is the time. It can be easy for homeowners to slack on maintenance, especially if they’ve owned the home for years. But, no one wants plumbing or HVAC issues to come to a head in the middle of a walkthrough.
Don’t forget to bump up the curb appeal with landscaping and power washing. The exterior, kitchen, bedrooms and sitting room will need the most preparation. Buyers tend to care about these areas the most. Start on those first, but don’t neglect to show other parts of the home some TLC, too.
Listing photos and staging are everything. The home must show its most unique qualities while remaining accessible enough for buyers to envision themselves living there. If you need help with taking stunning photos for your listing, the team at Real Estate Exposures can help. You can make an unforgettable first impression on buyers with the right lighting and photography techniques.
Aim to Match Appraised Value
An independent appraisal of the home will determine its worth on the market. The appraiser will check your house from top to bottom, and they’ll factor in aspects such as the local neighborhood and selling prices of nearby homes. Once you have that number, you and your client should aim to match the final selling price to it as closely as possible. Going too high above can deter buyers, while going too low can make you lose money.
When an appraisal comes in low, it may be because a home needs specific upgrades. Advise your client to begin modifications early in the home selling process. When the time comes for the inspection, it’s essential to hire an appraiser with knowledge of the area. They’ll have experience working with comps, which can give them a more accurate estimate of your client’s home.
Reach as Many People as Possible
You need buyers to make a sale. However, people won’t be able to make a bid for your listing if they don’t know it’s out there. Thankfully, our 21st-century world offers a plethora of marketing options for real estate agents looking to push a new property. Go the traditional route with real estate flyers featuring high-quality, full-color images of your client’s home. Full-bleed printing eliminates any unsightly negative spaces, while cardstock paper ensures the durability of your advertising materials.
Use social media to your advantage. Digital platforms are incredibly popular across various age groups. They make it easy to get your listing in front of people who’d benefit most from it. Within those platforms, you can use additional tactics — like video and storytelling marketing — to reach potential buyers.
Eighty-five percent of businesses use video as part of their campaign, while 83% say that video has generated more leads. Integrate this form of marketing into your business strategy by collaborating with Real Estate Exposures for a walkthrough video of your listing.
Contact Real Estate Exposures for Help With Your Next Listing
If you need some new strategies for creating successful listings, Real Estate Exposures can help you take your next home to the top. We offer a range of services that will make your listing unforgettable, including real estate photography, virtual staging and Matterport 3D tours. Stand out among the others by using technology to your advantage, and you’ll move your client’s houses off the market in no time.
Contact a representative at Real Estate Exposures today to get more information on how we can help you upgrade your next listing.