How Much Is My Property Worth?
When it comes time to sell your home, determining its worth is of utmost importance. This is because the home’s value will help determine the most appropriate listing price for the property in order to appeal to the broadest section of potential buyers.
However, the task of determining a home’s worth is not so straightforward. In fact, much is dependent upon valuations, appraisals, the bones of the property and even fluctuations in the broader real estate market.
Defining a seller’s and a buyer’s market
Market fluctuations will have a significant bearing on real estate property value. This is because the type of market, whether it be a seller’s or buyer’s market, will either increase or decrease the perceived value of your home.
Seller’s market
In real estate, a seller’s market exists when there are fewer homes for sale than there are buyers. This means that sellers have more negotiating powers than prospective buyers. Typically, in a seller’s market, homes do not stay on the market for long periods.
Traditionally, a seller’s market will see homes sell at, or above, the listing price and auction reserve. This is because the low number of houses for sale drives up competition between the potential buyers.
Buyer’s market
A buyer’s market is characterised by a large inventory of properties and few buyers. In this particular market, buyers have all the negotiating powers. With plenty of homes on the market and not enough buyers, homes remain on the market for months.
This means that sellers need to be competitive and settle for lower sale prices if they want to sell in a timely fashion. Sellers may also need to make other concessions such as undergoing repairs or styling their property in order to make the home stand out.
How is property worth calculated?
While the different real estate markets will undoubtedly play a role in dictating the price your property garners come sale or auction time, there are numerous other factors that work together to determine a property’s actual worth.
Local real estate prices
Along with market trends, local real estate prices will, in most cases, also affect property values. This includes past performance and recent sales results. If a comparable property in your area recently sold for a certain price, this statistic will inform your property’s worth.
Location
Location can make or break a home’s sale price. Water views or secluded homes with no visible neighbours will command more money than a home situated on a highway. It’s worth mentioning that properties with great locations are also easier to market.
Condition
When asking the question ‘how much is my property worth?’, condition plays a large role in determining value. A property that is structurally sound and in good condition will command more value. In contrast, a property that is dilapidated will be of decreased value.
Size and layout of the property
Size and layout also play a large role in determining the sale price. A property that has a backyard, front yard, five bedrooms and dual living areas will be worth more than a single storey property with no yard.
It is also worth noting that layouts can influence the value of a home. This is simply because prospective buyers will not pay top dollar for a home where the kitchen is not centralised, and the distance between the bedrooms and bathrooms is considerable.
Understanding the difference between a property valuation and property appraisal
When determining a property’s worth, sellers may want to consult a broad range of opinions. This can be achieved in two ways. Firstly, by what’s known as a property valuation. Secondly, by asking for a property appraisal.
Valuation
Performed by a Certified Practicing Valuer, valuations firstly involve a property inspection. Then, the valuer, who has no association with a real estate agency, will conduct research and analysis into the local market. The findings will be provided in a detailed report.
Appraisal
On the other hand, a property appraisal is conducted by a local real estate agent. The appraisal is an educated judgement on the home’s worth, taking into consideration local market insights and potential buyer interest.
Determining your property’s worth with LJ Hooker
Selling a home is undoubtedly a huge undertaking. For most people, their home is their biggest asset. With this in mind, they want to get the best possible price in relation to the property’s worth.
However, determining a property’s worth is a complex process. It involves taking into consideration factors such as market trends, property features, layouts and everything in between.
When it comes time to determine your property’s worth, engage LJ Hooker- Australia’s number one real estate brand. The LJ Hooker team offer experience and excellent market knowledge. All of which combine to provide sellers with invaluable insight. For the most accurate assessment of your property’s worth, contact LJ Hooker for a property appraisal.