Property valuation is the process of determining how much a property is worth to price it for a sale or purchase. Property valuation primarily takes into account recent sales of comparable properties in the area. Key identifying factors are the same square footage, number of bedrooms, and lot size, among other details. Professionals who determine property values for a living compare all the details that make your house similar and different from those recent sales and then calculate the value. (1)
Some other approaches and considerations can be used to assess the value of your property. Here is a comprehensive guide to help you understand and assess your property value.
Factors That Determine the Value of Your Property
To understand and even assess the value of your property here are some factors you or the appraiser need to consider;
Property Location
The location of a property is one of the main factors used to determine its value. If your home is located in a place with access to public transportation, your property will likely be of great value. In addition, if your home is in a neighborhood with excellent schools, hospitals, grocery stores, shopping stores, and entertainment joints, it will likely have a higher value than a house located in a neighborhood that is not appealing and accessible. And many Potential buyers, we buy houses in Kansa City companies and investors are willing to buy a house in a prime location at the highest price possible.
Square Feet (Size) and Room Count
Property size is another main factor that can influence the value of your house. Typically, a larger house (a five-bedroom house) will likely cost more than a smaller house (a two-bedroom house) in the same area. In addition, the size of the lot will also play a key role in determining how much a house is worth. But you need to know that extra square footage doesn’t necessarily mean additional value. It all depends on how the extra square footage is used.
For instance, if you have a four-bedroom house with a big backyard, it will likely cost more than a five-bedroom house with a small backyard in the same area. Why? There is a high demand for homes with big backyards as many people and Kansas City we buy houses companies are willing to pay high prices for such homes.
Amenities
What is in your home and the backyard are also evaluated to the get exact value of your home. For instance, if your home has the latest home appliances, a modern swimming pool, parking, well-maintained driveways, a deck, and a beautiful landscape it will be more valuable than a home with ordinary appliances, amenities, and a boring landscape.
Prices of Comparable Properties
Comparable home sales in your area will influence your home’s value or listing price. To know how much your home is worth, you can look at how much similar homes in the area recently sold for. Understanding the value of comparable properties can go a long way in determining how much your home is currently worth.
Your House’s Age and Condition
If you are planning to sell my house fast Kansas City, please know that its age and condition will influence its value. Typically, if your house is too old and is surrounded by new houses of the same size in the neighborhood, its value will probably be very low. In addition, if your house is in poor condition, automatically its value will be lower than a house of the same size and design in top condition.
State of the Housing Market
Many market forces influence housing prices. If your house is in a hot market with a very low housing inventory, its value will be too high thanks to the increased home prices. On the other hand, if the area has many houses on sale similar to that of yours, the value or price of the house will probably drop due to the effect of demand and supply law. There are other factors such as mortgage interest rates, economic conditions, and more that will also influence the resale value of your home.
Property Valuation Methods
Here are a few proven methods that can be used to assess or determine the value of your home;
Sale Comparison Approach
The sale comparison method is one of the most used approaches to determining the value of a property. If you are considering to sell my house fast Kansas City, you can use this approach to know how much your home is currently worth. This approach compares your home to similar homes in the neighborhood that have sold recently. Your home’s value can be slightly below or above that of similar houses depending on its current condition.
Income Approach
In this approach, the property appraiser will examine rental rates, expense statements, income, vacancy rates, market conditions, and other factors to determine the income and cash flow projection of a property and uses that information to determine the value of a property. This approach is mostly used with investment properties.
Cost Approach
In this approach, the value of the property is based on its replacement cost. In other words, how much it would cost to build a similar house on its current plot of land? However, after getting the replacement cost, you will need to subtract the depreciation value and add the value of the site to know its current value.
Use Online Home Value Estimators
Most we buy houses Kansas City companies and other real estate players have online home value estimators. These tools are used to determine a property value estimate. One just needs to provide the details of a property and the software will do the rest. Most of these tools rely on recent sales in your area to determine your property value.
Why is Property Valuation Essential?
Property valuation is essential as it can help you make a home sale or purchase decision based on the real market value of the property. It can also help you make better financial decisions if you want to upsize, downsize, or relocate. What’s more, it can assist you in calculating taxes, evaluating return on investment, and much more.