What Are The Micro Factors Affecting The Price Of Your House?

Want to sell your house in Ocean County? You can read many articles on how to avoid most common home selling mistakes. You cannot find the best deal if you are making any of these mistakes. Moreover, your house will stay longer on the market. So, you must avoid mistakes such as: 

  • Overpricing 
  • Underestimating the costs involved in the sale
  • Considering the highest offer only 
  • Ignoring costly renovations and major repairs 
  • Not preparing for sale
  • Choosing the wrong way or wrong agent to sell 
  • Limiting showings 
  • Ignoring the broader financial situation

Overpricing 

You are entering an increasingly competitive market. So, overpricing is a mistake you must avoid. You have to determine the real market value of your house. Now, the question is how to determine the property price. You have to consider the micro and macro factors affecting the price of real estate properties. Macro factors include economic indicators, interest rates, and investors. Micro factors include property location, updates and upgrades, inspection report, comparable properties in the neighborhood and appraisal value. 

Micro-factors Affecting The Price

Property Location:

How all know that price greatly depends on the location. However, in practical terms, how does it affect the price? There are some key factors related to the location. These factors have an impact on your life and lifestyle. Quality of schools is an important factor buyers with kids consider. Local employment opportunities is also a factor. Younger buyers value proximity to shopping, social and recreational centers. However, these factors are important for all home buyers

So, the following three preferences of buyers can make your house for sale more valuable: 

  1. Proximity to school 
  2. Work 
  3. Shopping/entertainment 

Updates And Upgrades:

Some buyers look for fixer-upper properties. Some buyers prefer buying a house that is ready to move-in. Most of the buyers are ready to pay reasonable premiums for this comfort. So, a new roof can significantly increase the price of your house for sale. The National Association of Realtors finds that making upgrades in the kitchen and bathroom can make a big difference. Both represent a major expense for the buyer. The buyer is going to use the space. So, not upgrading the kitchen and bathroom can be a major headache for the buyer. 

Inspection Report:

If the market is hot, some buyers may skip property inspection. However, it is a risk that mortgage lenders will not underwrite. Banks lend only when the inspection report is favorable. Don’t expect a bank to provide you with funds if you are investing in a termite farm. The inspection report impacts the price even when the property is under contract. This report uncovers unknown/undisclosed issues in the property. This reduces the price of your house. If the report recommends repairs, this creates a negotiation room for the buyer. A buyer sees the absence of insurance as a red flag. 

Comparable Properties:

Also known as “comps” similar properties sold in the area can also impact the value of your house. The real estate agent you are working with or the appraiser will look at recently sold houses with similar features and amenities. They can use these features as a benchmark to determine the potential price of the house you want to sell. However, keep in mind that short sales, foreclosures and cash for home buyers can make things a little complicated. These three factors lead to properties sold at lower prices. This can affect the overall average sales price in the neighborhood. Appraisers rely heavily on comps. 

Appraisal Value:

The appraisal is the formal process for pricing properties. The appraiser has to be licensed or certified. The services of an appraiser are especially required when a loan is involved. Most of the lenders do not approve loans without an appraisal. 

 

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