Market value of home

Choosing to extend the size of your current home via building a home addition is frequently a better decision than selling your home and buying a larger one. In addition to making financial sense, in many cases it also offers other advantages. For example, if you like where you live and/or have children in a school system that they enjoy, building a home addition can preserve these ties.

In addition to providing your house with more living space and saving money, building an addition can also be a terrific investment. However, before starting a large project such as building an addition, it’s important that you first consider several factors. These factors include: the size and scale of the home addition, the property market values in the neighborhood, required financing, architecture, timeline for completing the project, and the personal disruption that you and your family are willing to stand.

Before breaking ground on a home addition, you should first determine your specific extra living space needs. For example, what types of room(s) are you looking to add, and how many square feet of space is desired? Once you know what you need for space, it is then critical to find out the market value of houses in your local area with similar features and sizes to your new home plans. With this market analysis you can then determine the market value difference between your current home footprint and your enlarged home footprint. This market value difference should represent the maximum budget for the new home addition if you want to make a positive investment.

The next major issue that needs to be addressed is how to finance the building of a home addition. Unless the project is being funded via your personal savings then financing will be necessary. If current mortgage rates are higher than the existing house loan, then a home equity loan may make more sense. If current mortgage rates are lower than the existing home mortgage, then refinancing the entire home, including the cost of the home addition project, may make better sense.

After addressing the financing of the home addition, the next major item to focus on are the plans. It is important to consider both the size and scale of the addition, as well as the aesthetics and architecture of the new addition. The home addition should be designed such that it melds into the existing home and is aesthetically appealing from the road. It should not be too large or small relative to the original home. Frequently, homeowners build large additions that either dwarf the existing home or look like aberrations cobbled onto the existing home. Home market values are based on more than just living space. Exterior aesthetics play a major role in calculating the home’s market value.

It is also important to consider other items such as rooflines, doors, siding, windows, shingles, and height elevations. All should meld into the existing home exterior seamlessly.

If you are not planning to use an architect for designing the new home addition then consider purchasing a home design software package. There are a number of good ones on the market and they can help you in multiple ways. Besides providing you with overall sketches of the existing home and addition, they can provide necessary structural drawings to provide to the building inspector when pulling permits for the project.

The next two important aspects to consider are the timeline for completing the project, and the level of homeowner sweaty equity you are willing to provide. When developing a timeline, plan for delays and contingency plans. Regarding homeowner sweat equity, many homeowners over estimate their skill sets and time commitment. Do not over commit yourself both in time and skill sets. Hire contractors where you lack skills, tools, equipment, and time. Also where you legally can not perform the work, e.g. plumbing and electric, plan on finding licensed contractors. For smaller projects, such as installing interior doors, finish trim, painting, cabinet installation, tiling and hardwood flooring, by all means sign up for these tasks if you have the tools and skills.

Finally, remember that building a home addition is a major undertaking. It is also very disruptive to your home for many months. So before choosing to build a home addition, be prepared for the inconveniences of possibly not having a functional kitchen, contractors walking through your home, and loud noises throughout the day. Building a home addition is also a dusty and dirty endeavor. Finally, dealing with contractors can also be challenging at times.

If after considering all these factors you still want to move forward on building an addition, create your plans, hire your contractors, pull your permits and expect a few bumps along the way. When the project is complete you will have more living space, save money and maintain your home base.

For more information on building a room addition see HomeAdditionPlus.com’s Room Addition Bid Sheet.

By: Mark Donovan

A home appraisal is used to determine the market value of your home. This is formally known as a market analysis or fair market value comparison. An appraisal is an estimate of worth of a property in a competitive and open market.

Appraisals are important in selling, buying and getting a home loan. Whether you are moving down the street or across the country, an appraisal is important in selling your property. As a seller, you want the best price for your home and this process can help you. Buyers on the other hand need to know if the value appraised is more or less than the asking price.

A home appraisal can either be affordable and fast, or costly and time-consuming. You can do the latter by hiring a professional to come and appraise your property or you can do the former by consulting a web-based service that could access the data and be able to make a report fast. Both kinds of appraisal have the same information and the guidelines are the same.

An appraisal should be professional, unbiased opinions of your property and its market value based on its quality of construction, functionality, appearance and the value of comparable homes in the market.

Steps in Appraising a Property

1. The value of your home could be estimated through a comparison of similar properties sold recently. You could start appraising your home by looking at your neighborhood to find similar homes in neighborhoods that have the same lifestyle, surroundings, average age, income level of residents and home values. You may also consider recreational facilities similar to your situation. The aim is to find similar home value in the same neighborhood for your home appraisal.

2. Determine the price of your property is to compare it to the fair market value. The fair market value comparison uses the principle of substitution. This states that the maximum value of your home is set by the sales price of an equally desirable, similar substitute house for a certain time and day. You need to find at least three recently sold homes that have the same characteristics and amenities that yours have.

3. Make adjustments between comparable homes and your home. This equalizes the properties being compared. The comparable homes are adjusted in order to get the value of the subject home. You do not adjust the value of your property. If two comparable houses are identical with yours except that your property has a deck and the two does not have, then this could mean a higher value for your home.

It is important to get your house ready for an appraisal. Remove clutters and try to make your home clean and cozy. If possible, you can upgrade your home and repaint it to have a fresh appealing look. This way could add up to the appraisal value of your home. The best way to appraise is a careful research of the final criterion. The value of similar properties defines the trends in the market. Keep an eye on this and change your selling strategies.

By: Sonia C Llesol

It seems like there should be some formula that helps you decide how you should price your home. Unfortunately, there is no scientific method for determining the value. Assessors and REALTORS? understand that this process involves a number of factors, all subject to human opinion and/or error. Before you sit down with your REALTOR and determine where you should price your home, there are a couple of things you need to consider.

Price-Setting Tip #1: Use Recent Comps Only

If you’ve ever had your home assessed, you have certainly seen a list of “comps” or comparable homes, which the assessor compares your home to. This is the first important step you can take when you are considering setting the price for your home. When you decide you are ready to look at comps, keep the following factors in mind:

o Avoid using properties in the area that sold more than a year ago. Include only comps that sold within the past year.

o Consider the market in your area in order to determine the duration of the “peaks” and “valleys.” The Rolla/St. James market has peaks and valleys that are much more gradual, so a year back is a sufficient starting place.

Price-Setting Tip #2: Use Sold Homes Only

The second mistake that plagues sellers is using comparing their home’s price to another home still on the market.

o Homes that are still on the market obviously have not sold. Their price might be the reason, so using their price to set your own might not give you a good indication of fair market value. A house’s price is no indication that it will sell.

o Looking at homes that have already sold will help you focus on the goal of selling your home and give you a good indication of what has actually been successful.

o Finally, consider the size of your community when deciding the area to use for your search. In small communities (like Rolla and St. James), make sure that you are searching in a larger area. Whereas large communities are able to use a small area to find comps, like a 5-block radius for instance, in a smaller community you need to expand your search because you have a smaller sample from which to draw your comps.

Price-Setting Tip #3: Understand Your Local Real Estate Market

No matter where you are, it is imperative that you get a “feel” for the local market when you are trying to set the price for your home.

o Ask your REALTOR? to provide with information including the average number of days homes are on the market in your area. Focus on the specific price range you are considering for your home to give yourself an idea of how long it might take to sell your home.

o Again, consider whether you are in a large or small market. In a large market, the average time it takes to sell a home varies regularly, whereas a smaller market’s sales can be analyzed based on the last year.

Price-Setting Tip #4: Know the Real Estate “Seasons”

There are a couple basic “seasons” you need to be aware of when you are analyzing local data to determine a price for your home.

o Real estate sales are especially busy during late spring, early summer, and early fall.

o Sales drop off around Thanksgiving and Christmas, during the winter, and in the middle of the summer due to vacationing families.

o When the real estate market is slow, you may need to be more aggressive in your pricing strategy in order for buyers to notice your home. The most important thing you can do is price your home in a way that at least brings people in to look at it. The more warm bodies you have viewing your home, the greater chance you have of someone making an offer.

Before you set the asking price for your home, learn all you can about the local comps and real estate market. Knowledge of market trends can really help you cope with some tough decision-making when you are setting your home’s price. But the bottom line is that no matter how hard you work to price your home based on market value, you are still at the mercy of your potential buyer. You need someone to fall in love with your house, which is what keeps that air of unpredictability and excitement in real estate.

By: Justin Renaud

Whenever you decide to jump in the real estate market by selling your home, or if you just simply want to improve your home, there are a variety of things that you can do to increase your home’s market value.

Increasing your home’s market value can give you profit when you do sell your home, earning you more than what you spent when you first bought a home. This is usually a great tactic for people who are just aiming to play the market without real intention to keep a property that they have purchased. Nonetheless, even if you do decide to keep the home for yourself, your home’s market value will increase once you have invested in its renovation or reconstruction, giving it a whole new appearance and usability.

Increasing your home’s market value can be achieved by simply doing some improvements on the house, renovating it or reconstructing it to make it more appealing to potential customers, or even just for you. If your home has improved greatly from what it was initially when you purchased it, then you can bet that your home’s market value has increased. Here are a few hints on how you can increase your home’s market value.

One way that you can do this is through remodeling certain rooms in your home, such as the kitchen, dining room area, bathroom, living room area or even your home’s den. Whenever you are remodeling a particular room, it is important to bear in mind the room’s functionality, wherein you will have to take into consideration the space of the room, the appliances and furniture, and the room’s aesthetic value as well, minding the room’s design, color and lighting, and the harmony between all of the elements in the room.

One example is when you are remodeling a kitchen, you can increase the kitchen’s market value by just simply replacing kitchen cabinets with solid wood, or by adding a more expensive element to the area, such as adding an island or peninsula counter. Bathrooms can benefit from new tiles, as well as changing certain pieces in the bathroom, such as the lavatory or toilet. You can even remodel a room by simply adding or replacing your room’s wall paneling with quality, real wood paneling. Changing a room’s flooring will also help serve the purpose of increasing your home’s market value.

Aside from making certain changes or remodeling with certain parts of your home, you can also increase your home’s market value by adding certain features to your home that it normally does not have, such as indoor water features, which are great for making your home look more aesthetically pleasing. You can add wall fountains or small fountains, which can also help add moisture to the air, as well as block out noise from the outside of your house, giving your home a more soothing and calming atmosphere.

Another aspect of a home that you can improve on is the house’s thermostat. If you can make sure that your home’s thermostat is well-tuned, it will create a more uniform room temperature, costing you much less in your energy bill, making it an invaluable addition to your home.

Vanessa Arellano Doctor

http://realestatepress.org

By: Vanessa A. Doctor