Home Values – What is the True Value
Determining home values is important for buyers and real estate investors. Although not the same as the asking price, the value of a home can increase or decrease depending on buyers' perceived 'value' of amenities.
Another factor that affects home values is data collected through comparable sales reports. Comp reports provide information about recent home sales in the area. They are relatively easy to acquire in markets where there is considerable activity, but are harder to find in rural areas or communities where people stay put.
Buyers can obtain comp reports from realtors and real estate websites like PropertyShark.com and Zillow.com. When reviewing data it's important to compare apples to apples. Review prices of homes that have similar square footage, number of bedrooms and baths, lot sizes, and built within the same decade.
Comparing amenities is another vital element for acquiring accurate house values. If you're thinking about buying a house with an in-ground pool, look for other homes with pools that recently sold.
Location can impact the value of homes. When reviewing comp reports it's best to look for properties within a few blocks of the property you're interested in. This can be more difficult when buying houses in rural locations, but this factor usually isn't as important to buyers. People buying houses in densely-populated metropolitan cities value location more than buyers that want to live away from cities.
One way to buy a house for less is to monitor real estate trends. Homes tend to be priced higher when market conditions are healthy. One of the peak times for selling houses is in the spring, which actually begins the second week in January and continues through June.
Local, national, and international events can impact housing prices. Elections can create substantial fluctuation of prices. So can things like oil prices and the cost of petroleum by-products.
The longer houses sit on the market the more their value declines. It doesn't matter if the house is in pristine condition in the perfect location with desirable amenities. If a house has been listed for sale for longer than 6 months the perceived value goes down.
The truth of the matter is while comp reports, real estate appraisals, and monitoring trends can help buyers determine property values, only they can decide how valuable the property is to them.
Buyers might be willing to pay extra for an in-ground pool or try to negotiate the price if it's an amenity they won't get much use out of. They might not be enthusiastic about a gourmet kitchen or it could be the amenity the seals the deal. It's all about the buyers needs and the sellers desire to sell.
This doesn't mean that buyers shouldn't utilize every tool at their disposal. Even though the real estate market has undergone massive changes the real estate game is still the same. Sellers want to receive as much money as possible for their property and buyers want to get the lowest price. If they are lucky, they will reach middle ground and everyone walks away happy.
Last, but not least, appraised property values are an important factor for buyers that require financing. Qualifying for home loans has become more difficult since the mortgage crisis nearly crippled the industry. Banks are considerably more selective in who they will lend to.
Buyers that have never bought a house ought to look into first time home buyer programs that can offset closing costs or provide flexible mortgage terms. Another option is to look into Fannie Mae Homepath Properties.
Fannie Mae offers an abundance of foreclosure homes at affordable prices. Buyers have the option to apply for Fannie Mae Mortgages through Home Path Mortgage. This program lets buyers avoid paying mortgage insurance and has a minimal down payment requirement of 3 percent.
Buying houses can be an intimidating process; especially for first time buyers. We invite you to browse our extensive home buying article library to learn more about buying foreclosure homes, financing options, and resources for calculating home values.
Published on January 27, 2012 at 03:36 AM