Welcome to the second in my video blog series about accurately assessing a property’s market value.
In last week’s video I discussed the essential elements for determining land value either as a vacant site or as a component a home’s overall value. I also covered some of the basics in relation to the assessment methodologies we use.
So, this week it’s about assessing the value – or rather the added value – of the dwelling on your land, and there are five important characteristics you need to be across.
Five key elements
By mentally breaking down the home along these five categories and using them as the foundation of your assessment, it’s possible to quickly determine if the subject dwelling is inferior, superior or similar to recent comparable sales evidence.
Yes… it does matter! You should know the size of the house you’re assessing. Most agents nowadays provide a floorplan with the advertising material which will include the home’s square metreage. Make sure you understand whether the areas detailed are under roof, enclosed, covered outdoor areas (e.g. patios and balconies) or car accommodation. These different areas tend to add different levels of value, with enclosed living area normally the most valuable.
If all else remains equal, then larger homes tend to be worth more. You might see a comparable sale with the same features and room configuration as your subject, but if its 40 square metres larger, then it’s going to be worth more.
This is so important in a home. You can have one house that larger than another, but if its layout is dysfunctional and unappealing, the smaller house will be worth more.
Obviously, layout can be very personalised to the resident. The value of layout to you as a buyer might depends on whether you have small children or older teenagers. It might be about how well the living areas are separated, or the ability to keep an eye on the kids while you’re in your office.
For example, imagine a home that has a kitchen and casual eating on the upper level, while there’s a living space downstairs and bedrooms scattered across both floors. This could have a different value compared to a home where all the living, food preparation and laundry are on ground level, while the bedrooms are on the upper storey.
The floorplan determines the buyer demographic, so if you own a home with a floor plan that will appeal to a wide range of people in a certain suburb, then its value will tend to be higher.
The higher the quality of your fitout, the more a property will fetch. Be it any fixtures, fitting, appliances, floor coverings, benchtops, cabinetry… you name it.
I’m talking about high-level European appliances, thick stone benchtops, oak veneer floors, double vanity units in the ensuite and undermount sinks. All these things take its finish up a few notches, and make most buyers sit up and take notice.
This entails those inclusions that make the property more attractive to buyers because they enhance liveability.
For example, high ceilings in livings spaces, ducted air conditioning, Crimsafe screens, a Zip tap and so on.
Two houses of the same size and quality might have different features. If one’s additional features appeal to a wide buyer base, it will attract more attention and will likely achieve a better price.
I realise style is subjective, but when it comes to real estate, you want your style to appeal to as many people as possible. I’m talking about the colour pallet, the types of window treatments and your carpet choice.
While the cost of painting a home isn’t affected by the colour you choose, I guarantee that one which is purple with oversized gold polka dots on the outside won’t be worth as much as another in lighter, more neutral tones.
By looking at these five factors you can form meaningful comparisons between your subject property and recent sales evidence. This balanced approach will help reveal the market value of your prospect so you can make an offer with confidence.