10 Things to Know About the Cost of a House
What your home costs isn’t a cut and dry figure. If you’re in the market to buy or sell, keep these 10 points in mind.
Know the Comparables
According to Zillow, the asking price of a home should be within 10 percent of the average sold price in your neighborhood. Look for home sales in the past three months. Appraisers only look at comparable homes sold in the last three months.
Compare Square Footage
Appraisers look at square footage for determining a home’s value. So it’s important to take a look at similar homes that fall within 10 percent of the square footage of your home.
Be Prepared for Additional Closing Costs
Additional costs during closing can include things such as inspections, loan origination fees, and title insurance, so keep those in mind when putting together your down payment. The additional costs right at closing means it might make sense to put less money down in order to pay for the added expenses. Often closing costs are paid by the seller, but in competitive markets, it’s becoming more common for the costs to be split with or paid by the buyer.
While you’re spending all of this hard-earned money, be sure to budget your move to cut down on expenses.
How the Prices Show up in Searches
Real estate websites break down listings by prices in certain increments so if your home falls above one of those increments, you might want to change it so it fits. Realtor.com also suggests not using an odd number for your listing price because it makes things confusing for buyers.
What Appraisers are Looking at
Appraisers will focus on the condition of the important parts of the home like the age, square footage, number of bedrooms and baths, the size of the lot, as well as the location of the home. Appraisers will also take a look at the furnace and plumbing.
What can Boost an Appraisal
Discover says appraisers often value homes in $500 increments so it’s likely worth fixing something that costs $500 or more. Also, curb appeal is always important during an appraisal as well as for buyers looking at the home.
Know the Return on Remodeling Projects
A remodeling project isn’t going to return a dollar-for-dollar increase in your home’s value so be aware of that when considering projects. You might not like the kitchen in your home now but it might not make sense to completely gut it.
Find the best valued remodeling projects.
It’s important to say something if you don’t agree with the final report of value because a lender might choose not to fund a mortgage if there’s a big difference between the agreed selling price and the appraised value. Try to find out about the appraiser and their knowledge of your neighborhood before they come out to your home. If you’re not comfortable, ask for another appraiser.
Find out why hiring a home inspector pays off.
Location, Location, Location
The old standards of the neighborhood and the state of the schools in the area always factor into a price of a home, but so does the potential for future development, the proximity to retail, parks and other frequently visited places.
The inspection report can be a critical negotiation tool in buying a home. Whatever issues the inspection report turns up can move the price down potentially.