To find a market value for a property can be a bit of a puzzle, and it may seem pretty complicated to come up with an accurate number, but we’re here to help! When estimating a home value, some historically considered factors that influence the final figure have to be taken into account. Here is a brief guide to help you understand the elements involved in a valuation to figure out how much your house is worth.
On one side, we have controllable factors, as these are the things you can intervene in to increase the property’s values to its fullest potential. They are inherent to the house’s condition only, which we can divide as:
In this category, we can place all the aspects related to your home’s outer look. Things like the lot and the house’s size and style, the overall appeal – especially if compared to the other properties in the area – the current external condition, etc, will fall under this group.
These include the quality of materials used in the construction, design, number of rooms, energy efficiency, insulation, the updates and upgrades made to places like a kitchen or toilet. Also, the square metres are essential, but even more interesting is how they are used and how functional the rooms are. A house can be small, but if you take full advantage of every inch and the distribution adds flow and functionality, it can sometimes become even more attractive to buyers than one that doesn’t offer an optimised layout!
It is fair to say that, in both cases, age and condition play a significant role in the valuation of these factors. Buyers will find a property more appealing if there’s less fuss and work to do on it once they move in, aside from the obvious love at first sight when a property is stylish and new.
On the other side, there are uncontrollable factors. These are the ones we can only breathe in and welcome them as they are. There are times they can play to our favour, and some others, well…On top of this category: location. You may have chosen your neighbourhood back then, but there’s nothing you can change about it at this stage. It can be a bit of a lottery to guess how an area will end up developing. If a site is paved, sewers and drainage are installed, schools are available, if it becomes desired by the public to live in, if it’s close to the area’s main centre, all will become determining variants in the price.
Then, there’s supply and demand. The more buyers that are interested in the house, as well as the neighbourhood, the more the chances you will be able to get a higher selling price.
Lastly, the economic variables. If the country or market happens to be in a crisis or unemployment rises, the likelihood of a juicy selling price drops considerably. Migration is another key aspect, since it is in direct relation to our country’s housing demand.
Although they are not exactly a factor, council valuations – know as Capital Value or CV, can also be used as a reference to estimate the value. However, do keep in mind that banks don’t usually accept CV as a formal value for their lending.
Now, cutting to the chase! After all these years of experience in the industry, we can say that in practice, it is the buyers who dictate prices and have the final verdict on a house’s value. To give you an example, you can ask for two million dollars for a property, but if a buyer is only prepared to pay one and a half million dollars for it, this will precisely be the market value after all. You may choose to accept it, or stay and enjoy it until the market catches up to your expectations.
If you are looking to buy or sell a property in Auckland, or are struggling to calculate your property’s value, or simply are curious about it, it is a great time to call us at Kooger & Co!
We can certainly give you tips on how to get the most out of your house’s value, so get in touch with us today and get a free property appraisal and know how much your home is worth!