The difference between home price and home value causes confusion for many buyers and sellers. Both price and value are a combination of many variables that are constantly changing. Understanding what can affect home value will help you understand and navigate the market. Here are the key factors that go into determining a home’s value:
“Comp” is real estate lingo for a home in your area that’s comparable to yours. Real estate professionals research the value and prices of similar homes and use that as a guide for how to price yours on the market.
Prices in specific locations can affect your home’s value. If your area has become more desirable or popular with a particular group of homeowners, you may see an increase in home value. This is because the desirability of a specific location drives up the prices of the properties.
The size of your home is vastly important in determining valuation. The most commonly used method of pricing based on size is with price by square foot or the total price divided by the available square footage. Price per square foot can vary depending on other factors, but the size and usable space of your property is key in determining the value.
Usually, newer homes get higher values assigned by appraisers. A lot of this has to do with systems and structure of the home. For example, new plumbing, electrical and modern roof techniques fetch a higher price for their reliability and energy efficiency. Homes that need renovations or repairs before they’re livable may have a lower value, as most buyers prefer to spend more on a move-in ready property.
Large-scale trends on a local, state or national level also affect your home’s value. The big picture view of the overall economy might determine whether your home value is higher or lower because of factors like employment rate and wage growth. Staying up to date on the economy and housing market at large will help in determining the value of your home.
Home valuation is not an exact calculation. There are many variables that go into a home’s perceived value and even then, the number is just an estimate. However, the more you understand about these key variables, the more you’ll understand the value of your home.
Terese Ferrara is a long-time resident of the Bay Area and has been a partner with The Goss Real Estate Group for many years. She and her husband raised their two daughters in San Jose, where she successfully continues to build her real estate career.
After earning a bachelor’s degree from San Jose State University, she went on to teach in the San Jose Unified School District for 9 years. Transitioning to real estate was a logical choice, utilizing her patient demeanor to educate all levels of buyers and sellers. Knowledge and experience demonstrate her vested interest in delivering the highest level of care and professionalism to every client. She consistently strives to exceed her client’s expectations throughout the entire real estate transaction and remains a trusted advisor long after each close.
As a board member on KW Bay Area Estates’ Associate Leadership Council (ALC), she aids in support of culture and professional development strategies for over 180 associates. Terese is also a Director for the Santa Clara County Association of Realtors Foundation, which supports community service initiatives in Silicon Valley.
Terese is the consummate real estate professional dedicated to providing unparalleled service to her clients through ongoing training and education, keeping her on top of the dynamic market and latest real estate trends. Her high-touch approach coupled with honesty and integrity support her commitment to her client’s real estate needs.
