If you are currently a homeowner looking to put your property on the market, or if you are on the hunt for a new property, you’ll know that the value of the house you own or are planning to purchase is very important. Because homes are among the biggest assets people own today, it really matters that your property will add value to your portfolio. If it doesn’t, you can count on the home spending far too many days on the market and perhaps even going stale. Unless you are planning on living in said home for the foreseeable future, this will lead to you having to hold onto something that is, in fact, holding you back from further property investment.
But what factors add value to your property? Any good real estate agent will agree that a home that is ready to move into is the one that will attract the most attention from prospective buyers. While some homes that need a bit of work will ultimately be snapped up by people that are looking for a property to flip after renovating it, there’s a specific type of buyer that looks for fixer-uppers, while the bulk of potential buyers are instead looking for a home that doesn’t need quite as much work.
With that being said, a number of aspects do have a definite negative influence on the value of a property. Whether you already own a home and are planning to sell it, or are looking for a new property, you should certainly keep these factors that can detract from the value of your home in mind.
What factors are detracting from the value of your home
A high crime rate
It’s self-evident why crime rates might have an influence on the value of a property. When prospective buyers are looking for a home to purchase, they will definitely take the safety of the suburb or city they’re buying in into account. If a specific area is notorious for being plagued by crime of any kind, this will almost certainly have a negative effect on the impression buyers have about the houses that are for sale in the suburb.
While there isn’t a lot homeowners can do about the overall crime rate of the area that they own property in, it always pays to research things like the crime rate in an area prior to buying a home in specific areas. If crime has only become rife in the suburb recently, real estate agents will likely advise home sellers to get rid of the property before the area becomes associated with crime.
Aside from having an influence on the value of properties in a city or suburb, the prevalence of criminal activities can also affect insurance premiums in the area – this is another factor that might put buyers off purchasing property in certain areas.
If you are in the position of having to try and sell a home that is situated in an area that is affected by crime, you will have to make peace with the fact that it will have a hand in what your property will fetch on the real estate market. If a formerly crime-ridden area is being gentrified and upgraded, though, as is the case with many suburbs that might have been characterised by lawlessness in the past, property values can actually rise, coupled with a renewed interest in the area.
During initial discussions with your real estate agent, ask them what they would value your home at, based on a comparative market analysis. Taking into account what other, similar properties in your city or suburb are selling for will give you a good idea of what kind of selling price you can expect.
Bad kerb appeal
Unlike crime, kerb appeal is something that home sellers can actually do something about.
Considering it is the first impression prospective buyers get of the property, the importance of good kerb appeal cannot be overstated. When we talk about kerb appeal, we are referring to how attractive a home’s exterior is. This includes the property’s garden, driveway, front door, and the like. If a home looks shabby and dilapidated from the outside, it makes sense that buyers would be put off and unwilling to even bother to look at its interior.
When attending to a home’s kerb appeal, simply tidying and cleaning up the exterior already goes a long way – and it isn’t expensive! Insofar as it pertains to the driveway, for example, giving the pavement a good clean to get rid of any oil stains or other dirt that may have accumulated will have a huge effect on the way the home is perceived by potential buyers. You’ll be gobsmacked by the difference a little bit of cleaning makes, also in the yard and garden. Even if you aren’t really fond of gardening and haven’t picked up a shovel or spade in years, moving the lawn, trimming the hedges and edges, and pruning the trees will make the garden look like a new penny. Don’t forget about the front door! Often called “the handshake of the home”, the porch and front door will look brand new if you apply a fresh coat of paint and clean up the area.
Kerb appeal falls under what real estate agents refer to as staging the home. By doing this, sellers are able to try and appeal to the largest possible group of buyers. This means getting rid of any sentimental, religious or political regalia that might have an influence on buyers’ impression of the property. The golden rule is to keep it neutral and simple, highlighting the best aspects of the property. As your real estate agent what aspects of the property are worth highlighting, and ensure that kerb appeal is something that lures buyers in instead of pushing them away.
If you are planning on undertaking some renovations before listing your property, make sure that this really adds value and isn’t of poor quality or workmanship. While many homes will require a bit of work before putting them on the market, the real estate agent that is helping you to sell will advise you on repairs and renovations that won’t break the bank, but will impress potential buyers. They might also recommend specific service providers that they trust to undertake the necessary work, and that don’t charge an arm and a leg.
The fact of the matter is, renovations and repairs mean nothing if they aren’t done well and completed in time. You can be sure that buyers will notice a missing tile or an incomplete paint job, and even if you guarantee that the work will be done by the time they take ownership of the home, you will already have created the impression that this home needs work.
It is better to have completed all repairs and work on the home before the property officially enters the market. Sellers will likely insist on having a home inspector take a look at the property before buying it, and you’re far better off making sure that this doesn’t become an issue when the sale of the property is in the home stretch.
Schools with a bad reputation
As is the case with other amenities like shopping centres and restaurants, schools also have a big influence on the value of homes in specific suburbs, especially if these suburbs are popular among young families. Schools that have a bad reputation will force parents to send their kids to other schools, which might require a commute that would otherwise not have been necessary. In cases like these, parents will rather look for a home closer to the school they choose to send their children to, which means that this will definitely have an influence on property prices.
Just like crime is something that is out of the control of homeowners, the quality of education is something that homeowners in certain suburbs can’t do much about. This is why it’s better to research these factors before even buying a home in a bad area.
On the other hand, you can speak to your real estate agent about targeting a different demographic when advertising the property. If you know that the local school has a bad reputation, think about focusing on older buyers who may not be as bothered about it. However, keep in mind that getting a buyer doesn’t mean that you’ll get the price and profit you are looking for.
There are a variety of factors that can influence the price of a home on the market. Homeowners cannot really do much about things like a high crime rate or bad schools in the suburb, and will have to accept that these factors inevitably have a hand in what homes ultimately fetch when they are sold.
Sellers can better the impression potential homebuyers have of their property by improving its kerb appeal and ensuring that renovations and repairs are done timeously and properly.
Are you still looking for a real estate agent to help you make the most of your home-selling experience? Perfect Agent has a list of candidates that tick every box.