Credit: Whether you’re a first-time homebuyer in need of home insurance or you’re putting your home on the market, you must first determine the value of your home to accurately protect or sell it.
Homes depreciate over time, and establishing a house’s value can be complicated, as many aspects are considered. The following are a few of the factors that affect your home’s price tag.
Age
The age of your home can make a big difference in pinpointing the value of your home. In most cases, homes with historical significance that are well maintained and newer homes are considered more valuable than those that fall in between.
Though age can play a big role, the condition of the home is what truly matters. Well-kept houses that are move-in ready are usually more valuable than fixer-uppers.
Size
When it comes to houses, size matters. Most homebuyers want spacious homes, but choose to avoid the largest homes on the block, as more maintenance needs accompany more square footage. Think of it in terms of Goldilocks and the Three Bears – not too big, not too small, but homes that fall in that middle ground of “just right” tend to be more valuable.
Also, homes with open layouts typically have higher values than houses that are more closed off. The former often look larger than the latter, even if the two houses in comparison are the same square footage. In the same vein, homes with fewer but larger rooms are considered more valuable than their counterparts with more rooms that are smaller.
Location
Your home’s location plays a key role in its value, particularly its proximity to quality schools, nightlife, retail establishments, parks, grocery stores and restaurants. Many homebuyers wish to invest in a home that’s within walking distance of entertainment and recreation and in a district that would provide their children with a solid education.
Location also extends to the view the home has and the quality of the area of town. If the home is located along a lake and has a scenic view, it will often be more valuable than homes located next to less desirable attractions, such as highways or train stations that can be noisy during all hours of the day.
Renovations
If you’re planning on tackling renovations to increase your home’s resell value, proceed with caution. Before getting started, visit other homes on the market in your area to ensure that you’re not going overboard with upgrades. Believe it or not, you can actually overdo it on the renovations. Homebuyers gravitate toward homes that are standard in your area. So as a rule of thumb, keep it simple.
You may want an expert opinion. If that’s the case, hire an appraiser to walk through your renovation ideas with you and ask about the impact any upgrades would have on your home’s value. Buyers want homes that are well kept, so if you do invest in renovations, keep a record for the future owners of your abode.
History
Certain events that occur in a home impact its value. For instance, if your home was the scene of a violent crime, formerly a meth lab, endured a fire or dealt with a mold issue, its value may take a plunge. Conversely, if your home has a clean record, it may be valued higher than others in your area.
Home Values and Home Insurance
Your home’s value is a crucial part of finding a fitting insurance policy. Dwelling coverage is part of standard policies and insures your home for the cost it would take to rebuild it in the event that it was destroyed by a covered peril. When determining dwelling coverage, factors such as the cost of materials and size are factored in, while the cost of your plot of land is excluded (you wouldn’t need to rebuy the plot, just rebuild the home).
Speak with an appraiser and a licensed insurance agent to determine the right amount of dwelling coverage for your home.
Shannon Ireland writes for SafecoInsurance.com and HomeInsurance.com, an online resource for homeowners and drivers across the country. Offering comparative automobile and home insurance quotes, consumers rely on HomeInsurance.com for the most competitive rates from the top-rated insurance carriers in the country. The HomeInsurance.com blog provides fresh tips and advice on a range of financial topics to help homeowners and homebuyers make educated decisions about their insurance purchases.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
