10 Factors Used to Determine a House's Value in this Seller's Market

Zachary Walston

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With many buyers currently offering over list price to secure a home in this market, they are left wondering if the house will retain value. Its a good question and one I decided to answer by going to an expert.

To learn more about which factors influence a home's value, I sought expert insights from Lindsay Walston, a real estate agent based out of Atlanta, GA.

Cosmetic upgrades generally increase the value of your home, but only to a certain point. There are actually many other factors that play a bigger role than you may realize. These things are worth considering, even if you are just purchasing your first home because it can ensure that you are making a good investment. - Lindsay Walston

Lindsay shared ten factors that influence a home's value. Pay special attention to which ones you can influence after purchasing a home and which ones you cannot.

#1 - Location, Location, Location

Location matters, probably more than any other factor on this list. Why?

There is very little you can do to change where your home is located. Most of us aren’t about to pick up and move a house, so what you see is what you get. - Lindsay WAlston

Factors like commute time, convenience, nearby shopping, safety, crime rate, and walkability can significantly impact the value of your property. This can change over time, so it is helpful to know any proposed or planned changes for an area if you are considering purchasing. Being informed can help you select an area that may be “up and coming” but also protect you from any potential reduction in value, such as redistricting expanding the road running directly behind your chosen home.

#2 - School Zoning

Even if you don’t have kids in the school district, your potential buyers might. So, either way, it’s worth considering when you’re buying a home because it will absolutely impact your resale value. - Lindsay Walston

Homes in high-demand school districts have a much more insulated resale value, even if the market dips, so they tend to be a more secure investment. Take the East Cobb market in the north Atlanta suburbs as an example. Lindsay will see a 10% difference in the value of two exact homes if they fall in one of the high-demand high schools - Walton, Pope, or Lassiter - compared to any other East Cobb school.

This means you will pay more money for the same features in a home. If you’re on a tight budget, then sacrificing the school district is an easy way to get more for your money. Just know the same will happen when you sell. Your buyer pool will likely be smaller and resale value lower than a similar home in a high-demand school district.

#3 - Neighborhood Comparables or “Comps”

As the saying goes, you don’t want to be the best house in the neighborhood. There’s a reason for that. Upgrades will improve your home value, but only up to a point. After that point, additional improvements have a diminishing rate of return - known in real estate as over improvement. - Lindsay Walston

Homes in your surrounding area can either help drive your property value up or bring it down so they must be considered whether you are buying or selling a home. While you can explore the neighborhood and get a good idea of the level of attention to the exterior of nearby homes, you will benefit from a professional's eye.

This is where your local real estate agent should come in.

Lindsay explained how a real estate agent can run a comparative market analysis (CMA) and tell you exactly how much a home is worth. By assessing the local market, updates, home features, and other variables, a real estate agent can provide a more accurate value than the Redfin estimate. The CMA can help you price your home correctly for sale and protect you from overpaying when purchasing a home.

#4 - Age of Systems and Roof

A chef’s kitchen and luxury owner’s bath are generally high on many buyers’ wish lists, but do you know what also tends to top the list? The age of a home’s systems like the HVAC and condition of the roof. - Lindsay Walston

No one wants to purchase a home and immediately spend a lot of money to upgrade these systems or replace the roof. If either of these items is towards the end of their life, consider replacing them. The return on investment is high and you will attract more buyers.

Deferred maintenance can deter potential buyers and cause your home to sell for significantly less than it might otherwise. If the roof is in bad shape, it can prevent the bank from issuing financing because of potential leaks and property damage.

#5 - Storage Space

Storage space is a high priority for buyers. Most people generally have a lot of stuff so things like oversized closets, cabinet space, attics, and basements are a huge plus for some and a non-negotiable for others. - Lindsay Walston

If you are downsizing, functional accessible storage options are a must. Unfortunately, in many upgraded or “flipped” homes, storage is often sacrificed for a more open floor plan. Make sure you scope out a home’s storage options to ensure you will have enough space.

#6 - Your Garage

Homes with a garage sell for roughly $23,000 more than homes without one. A garage offers additional storage space. Most buyers value a place to park their car safely and are willing to pay a premium for it.

#7 - Your Lot

While yard work might not be for everyone, the size, location, and function of a lot matter when it comes to resale value. - Lindsay Walston

Less desirable lots that back up to a busy road or aren’t usable due to a significant slope, a creek, or large retaining wall are big deterrents for potential buyers and will negatively impact resale value. On the other hand, large, flat lots with ample space or a feeling of privacy generally sell for a premium.

#8 - The Home’s Layout

An unusual or choppy floor plan is a major deterrent for most home buyers. It generally costs a lot of money to change the layout of a home, and your potential buyers know that too. - Lindsay Walston

Homes with an open concept - but not necessarily a single room warehouse feel - generally offer the best resale value. The layout shouldn't just take into account common areas. Consider the locations of things like bedrooms too. Bedrooms not only have a closet but also a full bath close by.

#9 - Natural Light

No one wants to feel like they live in a dungeon. - Lindsay Walston

High levels of natural light not only make a space feel bigger, inviting, bright, and airy. Consider the number and location of windows and any outside objects or structures that might block natural light.

#10 - Curb Appeal

First impressions matter. How your home looks when you first pull into the driveway matters. - Lindsay Walston

When it comes time to sell, a well-manicured lawn can be just as important as any interior remodel. Landscaped homes sell for an average of 6-7%. So, break out the lawnmower and edger.

This isn't a comprehensive list but it hits the big factors that affect a home value. Whether you are buying or selling, be sure to run through the list and put yourself in the best position possible.

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I am a physical therapist, researcher, and educator whose mission is to challenge health misinformation. You will find articles about health, fitness, medical care, psychology, and professional development on my site. As the husband of a real estate agent, you will also find real estate and housing tips.

Atlanta, GA
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