Factors That Affect Property Value
What Influences Property Value?
Written By: Mariko Baerg, REALTOR of Bridgewell Real Estate Group
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There are a number of factors that affect property value, and it’s important to know this before you buy or sell a home to help you determine market value.
This blog will help you learn how to determine a property’s value so that you buy and sell for the right price.
Read on for the most essential factors that affect property value!
Location, Location, Location!
The location is one of the most important factors that affect property value, and homes can differ substantially based on the cities, subareas, or even streets that they are on! Is your location close to a city centre? Is it nearby a skytrain station or bus? Is it close to shops, schools & restaurants? Alternatively if it’s on a busy street, in an area that has a bad reputation for unemployment or crime, or far away from the downtown core then the home will likely have a lower value.
Supply and Demand
The economic environment is definitely one of the factors that affect property value, and if demand exceeds supply then property prices will see an increase. The more people in the market looking for homes paired with a low amount of people willing to sell their homes, will result in competition for homes and multiple offer scenarios. Alternatively, if there is a high amount of supply and lower or balanced demand then we will experience a cool or balanced market.
Recent Comparables & Market Performance
Comparable recent sales will set a precedent for what you can sell your home for, and a recent sale that is higher will impact your sale for the better. You’ll want to go through the performance of the market within the last 90 days, and review both active and sold properties with a realtor. If you’re looking for a free market evaluation, give us a call and we will help you determine your market value and the best pricing strategy!
When interest rates increase or decrease, this can affect the value of property. When interest rates rise, this affects the monthly mortgage payment for a buyer. This change impacts their affordability, which can in turn balance out the demand in a hot market. Conversely, an interest rate cut means it’s more affordable to buy, and if there is an announcement that interest rates will be raised it can create an urgency for people to buy now.
Size and Age
The size and age of a property will affect what it is worth. In most people’s eyes, the bigger the better – so a 2 bedroom condo is likely to be worth more than a 1 bed in the same area. If your home is newer and under warranty (2-5-10 warranty in BC) then that will add value as well. Features like extra bathrooms, more parking, and dens will also impact the property value in a buyer’s eyes.
The Realtor You Choose
The realtor you choose can make a huge difference when it comes to what your property sells for. Someone that knows the neighbourhood you’re in, has experience selling the style of home you have, and has an aggressive marketing plan to get your home sold will ultimately be able to bring more exposure to your home and convert those leads in to a sale for you. Furthermore, a realtor that understands the market and can determine the best pricing strategy for you based on comparables and your goals will ensure no money is left on the table. Call us today for a free market evaluation, or learn more about how we help homeowners sell for more here: Sell For More
If a property has good investment potential then this will impact it’s value for the better. Factors such as the rental income, potential return on investment (ROI), capital growth, and ability to rent (i.e. no rental restrictions) will open up the pool of buyers to investors for purchasing.
Proximity to Local Transport
Tying in to location, having a home with close proximity to local transport will have a higher demand than others. Properties nearby rapid transit, busses, or train stations will be preferred to ones further away. Additionally, being close to a highway or major road may bring more buyers that drive to work in an urban area weekdays.
History of the Property
If your home has had history with wind, fire, water damage, foundation issues, infestation, or matters of this sort then this may affect the property value negatively. Even if it’s been fixed and there are no further issues, buyers will feel that there may be potential for this issue to occur again and will want to have this taken in to consideration during the negotiations.
Renovations & Condition of the Property
Buyers like properties that are move in ready – the less they have to do in terms of renovations the easier for them! Most buyers will pay more for a property that is renovated than one that is in original condition. Similarly, if a home is well-kept then it will sell for more that has not been maintained over the years. The condition of the home matters and is one of the main factors that affect property value.
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