Jimmy Stepanian | Super 6 Biggest Factors Affect Real Estate Prices | The real estate market in the Canada or United States has recover importantly from the housing crash of the late-2000s, with down interest rates and limited list creating an ideal environment for sellers in few parts of the country. Buyers, on the other hand, often face grow real estate prices, instruction wars and extend search periods as they enter an increasingly aggressive market. This is particularly true in parts of California, which is home to four of the nation’s five most expensive housing markets in San Francisco,Toronto, San Jose, Orange County and San Diego.
1. Property Location We have all heard the phrase “location, location, location” but what does this mean in practical terms when it comes to property prices? Economists enclose “location” in something called “hedonic pricing” for most homes, this translates to some useful key factors that impact your life and your daily lifestyle
Quality of local schools is regularly the single most useful factor for buyers with children of school going age Proximity to local employment opportunities is a high priority for most employment age buyers Proximity to social, shopping and recreational centers is valued most by younger buyers but plays a very important role in pricing for all home buyers
2. Updates and Upgrades Some buyers actively try out fixer-upper properties, most home buyers recommend a house that is move-in ready and they are willing to pay a sensible premium for that comfort. A new roof, for example, generally regain more than 81% of its value when the home is sold. According to the National Association of Realtors, upgraded kitchens and bathrooms are among the very important upgrades cited by home buyers because they represent a most expense, if the buyer has to upgrade them. To understand regional changes in how upgrade investments recoup their value, Remodeling Magazine provides regional reports rich with data. For example, steel entry doors and manufactured stone veneers tend to give special coast homeowners the most bang for their resist upon selling their properties. 3. Inspection Report In some big markets, buyers may drop their right to an inspection report but that is a risk that most mortgage lenders would not underwrite. For most buyers, mortgage financing is contingent on a favorable inspection. Even if a home is under contract, the inspection report can greatly impact the price of the home. The more recommended repairs on the report, the more aranging room a buyer has. If the deal drop through, the seller must disclose the inspection report to future buyers, further dampening the more chance to sell at the original listed price. 4. Neighborhood Comps The Comparable properties, sometimes called “comps”, sold in your area also effect your own home’s market value. Appraisers and real estate agents look at new sales of homes with similar features to use as a benchmark against your home’s potential price. Fore-closures and short sales often complicate things because they tend to sell at down prices, decreasing the neighborhood’s overall average sales price. Comps are usually the key driver for the appraisal process, most appraisers will rely heavily on new nearby transactions on homes of a similar size to yours. 5. Appraisal Value The appraisal is the real estate industry’s important process for pricing a property. All states require appraisers be licensed or certified by an organization accredited by the Appraiser Qualifications Board (AQB). Whenever a loan is involved in the financing of a property purchase /home equity borrowing, an appraisal is almost always required. Most lenders would not approve a loan for more than the appraised amount, so if the assessed value down short the seller either needs to lower the price or the buyer needs to put more extra money down to decrease the loan amount.
6. Interest Rates When people talk about the â€œFed interest rateâ€?, they usually mean the Federal Reserve overnight borrowing rate for depository institutions. This is a key factor in how mortgage rates are established because it sets the cost for banks to borrow money. Lower Fed interest rates typically lead to lower mortgage rate offers from banks; this, in turn, decreases the monthly mortgage payments a homebuyer must pay for a given mortgage amount. Get investment top 7 business Visit Here Check 8 ideas of product development Visit Here Check more detail about me
Published on Dec 2, 2016
The Comparable properties, sometimes called “comps”, sold in your area also effect your own home’s market value. Appraisers and real estate...