The purchase of a home is by far the most serious purchase that most people ever make. However, most people are unaware of how the value of their home is decided. They are also unaware of what factors cause their properties to decline in value. Aside from the fact that 48% of homeowners exceed their remodeling budget, many of the factors that negatively impact the cost of a home are entirely out of the homeowner’s control. Here we will show you five factors that detract from home values.
1. Unfavorable School District
Having a property in an undesirable school district can have a seriously negative impact on your home’s value. Most families either have children or are expecting to have children. If the home they are looking at is in an area with a school system that is not up to par, they will likely pass on the house for one that is in a suitable school district.
It has been shown time and again that buyers are willing to spend more money on properties that reside in an area with a desirable school district. This means that having a home in a lousy school district has an apparent adverse effect on the valuation of the property.
2. Proximity to Other Places
Having a home located too close to areas that have been deemed harmful to home evaluator’s standards will lower the value of a property. Just being in proximity to some places can tank your home’s value. Residing in proximity to the following sites can decrease your property value:
- Railroad Tracks
- Gun Range
- Power Lines
- City Dumps
- Power Plants
3. Bad Neighbors
Living near or next door to people that are not seen as conscientious towards the peace and quiet of the neighbors in the community they reside in can hurt your home’s value. Noisy and hoarding neighbors will make your home’s value drop. Having a registered sex offender in your neighborhood can also make your home less desirable to buyers and evaluators.
4. Kitchens and Bathrooms in Need of Attention
This is something you can personally address. If you have a kitchen or a bathroom that needs renovation, failing to do so will cost you when you go to list your property. Improvements in the kitchen and bathroom are a surefire way to increase the value of a home.
5. Lower Comparable Homes
The main factor that appraisers look at when appraising a home is homes in the immediate area that carefully compare to that property. Similar homes that have sold in the past year are looked at to help ascertain the value of your home.
Home values remain a mystery to many, but now you have a peek inside how external factors can adversely impact these numbers. If you are interested in knowing your current property value, a property value estimator will give you a good indication of how much your property is worth. If you want professional assistance with getting a current value on your home, you can ask your realtor for comparable market analysis (CMA) or hire an appraiser to conduct an assessment on your property.