Complete Guide To Home Valuation
When you’re selling or buying a home in Gainesville, you’ll hear the term “home value” over and over. To many individuals and families, “home” is more than just a roof and walls, so can you really put a number on the value of a home? Yes! In fact, a home’s value is a key part in the entire home-buying transaction and can affect financing, listing price, property insurance, and property taxes. This property valuation guide from Rabell Realty Group breaks down how home valuation works, its importance, and ways you can boost your home’s value!
How Does Home Valuation Work?
A home valuation is found by using one of three methods of a Gainesville real estate appraisal. The sales comparison approach, or market data approach, compares the property to other properties with similar characteristics that recently sold. Sales comparison is frequently used for single-family homes.
The cost approach is rarely used for single-family homes as it estimates properties that were improved by adding one or more buildings. And finally, an income capitalization approach uses the rate-of-return required by an investor and the net income the property can or does produce.
Difference Between Value & Price
The real estate valuation of a home is the current worth of future benefits that come from its ownership. Estimations of a home’s value take into consideration internal and external characteristics of the home, economic and social trends, governmental controls and/or regulations, and environmental conditions.
Price is the amount a person pays for something, in this case a home. The cost of a home is actual expenditures, such as labor and materials. Price and cost can affect a home’s value, but they don’t determine the value.
How Is My Home Value Determined?
Keep in mind the value of a home will ebb and flow over time. But there are four leading factors that determine the home’s value: land, location, history, and outdated renovations.
The land a home sits on appreciates over time, whereas the physical structure of a home generally depreciates. The explanation is simple supply and demand. Land is a limited supply with an continual demand behind it. You’ll see land valuation in Gainesville increase in popular areas and decrease in others.
“Location, location, location” is the one real estate phrase which has withstood the test of time — and for good reason. The location of a home, even in its own neighborhood, is everything. A home located near new infrastructure, such as a main thoroughfare into a city, will likely have a higher value than a home on an older cul-de-sac.
The home’s history plays a big part in its value. Past flooding or water damage that caused mold is taken into consideration for the home’s history. In fact, a neighborhood’s history can affect the value of your home, for example, if the neighborhood was once associated with a high crime rate.
Outdated or Too Many Renovations
The built-in china hutches you had installed in the den aren’t necessarily in-demand among potential buyers. It’s also possible to have too many renovations done when a few basic upgrades would have more appeal. But, keep a record of repairs and upgrades to show potential buyers what has been done to maintain the home.
Bank Valuation is Different From Market Value
Bank valuation is determined through home details such as general location and zoning; overall size and number of rooms; building structure and condition; and vehicle access to the home. It’s set by the bank or lender with whom you’re applying for a mortgage. The bank valuation is commonly the amount the bank could recover, and quickly, should a default on the mortgage occur.
The market value is the likely price your home would bring in a competitive and open market. Or, it’s what a potential buyer is willing to pay and you as the seller is willing to accept. Keep in mind the market value may differ from the market price.
Why Is Home Valuation Important?
Your home’s valuation is what determines the amount you, or someone who buys your home, will pay in property taxes. This value comes from an assessment done by an assessor from your local municipality or county. The assessor looks at what similar properties have sold for, value of recent improvements, income you’re receiving from it, and other factors including replacement cost. An assessment rate is then applied to this value and from there property taxes are determined.
The valuation also dictates if you have enough equity in your home to sell it without needing a significant amount of cash at the closing.
How to Boost My Home’s Value
Since your home’s value has such an impact on both you as a seller and potential buyers, there’s no question you want it to be as high as possible. But is there anything you can do to boost the value? Absolutely! Here are four areas to start boosting your home’s value, whether you’re planning on listing it next week or down the road.
Go Energy Efficient
Being energy efficient isn’t a phase, it’s a feature more and more potential home buyers are wanting and home sellers are embracing. Check with your local utility company to see if they can perform a home energy audit on your home. This audit will tell you where you’re literally losing money each month and give you a clear idea of where to begin. Insulation improvements often provide the quickest payback to investment, followed by switching to more energy efficient appliances.
You don’t have to undergo a multi-room renovation at once to increase your home valuation in Gainesville. Research the upgrades and renovations you’d like to undertake and make a list of the ones which would improve the home’s value. Not all upgrades and home renovations increase value, and some may actually reduce the value.
Gainesville Realtors will tell you the one place in your home which packs the biggest return-on-investment is the kitchen. But don’t worry that you need to find a sledgehammer and begin a full-scale upgrade. Switch out your older refrigerator for a stainless steel model. Be bold with the backsplash, whether through color or tile. There are many things you can do to boost your home’s value without breaking the bank.
Spring Cleaning Year-Round
Don’t think of spring cleaning as that once-a-year arduous task that doesn’t give anything back. In fact, keeping up with spring cleaning or deep cleaning year-round, you’ll be able to see potential issues early and avoid emergency repairs. It’s also easy to declutter and get rid of things you wouldn’t want a potential buyer to see anyway.
Spring cleaning year-round should also spill over to the curb appeal of your home. Power washing the sidewalk after cleaning up the edges can be an instant boost in the curb appeal. Just remember keeping things clean and tidy plays a big part in selling a home in Gainesville.
Let Rabell Realty Group Help You!
As a Gainesville, FL real estate firm, we know how the home valuations in our area have ebbed and flowed over time. But because a property you own or are looking to buy historically held a lower than expected value doesn’t mean it can’t increase or hasn’t. We consider a home in its entirety when helping you buy or sell, putting our years of experience to work for you. Turn to the Gainesville Realtors with a personal touch, Rabell Realty Group!