Every single thing in this world has a fair value. Although something might be higher than the other, it doesn’t mean that the lesser are worst. It might be hard to comprehend as this notion is quite complex and confusing, but, if you’ll have the heart to befriend its complexities, you’ll realize that distinguishing one from the other is not really a difficult thing to do.
Viewed as both an art and as a science, calculating home’s worth is nevertheless makes the worth of a home exactly as much as someone is willing to pay for it. Regardless of the method used in establishing a home’s value, unless a buyer is willing to pay the given price, the set value would be meaningless. On the other hand, several methods to establish a fair market value for a home can be used. The core of most of these methods is based on what other buyers have paid for comparable homes in the same area. This method is referred to as comps. If there are no comparable properties in the area, comps can still be used to launch a base price for the value of a home per square foot and this figure can then be applied to the home in question.
To determine the price cost of a home, here are some of the tips on how to do so:
Step 1: Look for other houses in your area that are analogous to your home. Something that is exactly the same in terms of the number of bedrooms, bathrooms and square footage is concerned that have been sold for within the past four months.
Step 2: Assess the condition of your home. Be reminded that the condition of your home will greatly affect its value. If your home is in poor condition, obviously its value will be diminished by the amount of money it would take to make it truly comparable with other homes that have recently sold in your area. On the other hand, if your home is something that has facilities that other homes do not possess, this could affect the price into an astounding increase someone is willing to pay.
Step 3: Find out the number of homes in your area that are out for market. Like any other properties, if the supply is high, prices of properties would not be that high. Therefore, if a lot of houses are for sale in your area, the less you may be able to charge for your home if you wish a quick sale.
Step 4: Consider your house’s age. Add or subtract value based on the age of your house. Take also this in consideration when you are looking at comps in your area. Take note, most buyers are willing to pay more for a newer home and less for an older one. Why is this so? Well, this is mainly because newer houses would mean lesser need for repairs. And in that case, lesser money would be put up to restore the beauty of the house.
Step 5: Calculate the square footage of your home. This could be e done by having a smart guess on the square footage value f homes that have recently sold in your locality and apply that figure to your home. For your better understanding consider this situation. For example, a comparable home that is 2,000 square feet is recently sold for $400,000 then the square footage value of that home was $200 per square foot. By knowing this, you can casualty on how much would be the cost of your house considering a 1,700 square feet. By multiplying the surface area of your home with the amount per square feet, you can get a value that may be a fair cost of your home and that is $340,000.
With this information, it would be a lot easier to establish a fair market value of your property. Also, for buyers, the ideas mentioned above would also extend a hand for them to realize what important factors are to be considered before they can judge a home to be sold in a fair amount.