What Determines How Much Your Home Is Worth?

Most people never know the value of their home until they try to sell it. A house that seems like a great deal to one person might be out of reach for another.

What's your house worth? Many factors can dictate how much your home is worth, and it's important to understand them all before putting your property on the market. Read below to discover two important factors that affect home prices today.

Condition of the Home

The first and perhaps most obvious factor that homebuyers will consider is the property's condition. Is the home in need of repairs? Is there any major damage or cosmetic issues?

The state of the home will play a big role in how much someone is willing to pay. A home that's in move-in ready condition will obviously fetch a higher price than one that needs work. Potential buyers will often lower their offers if they know the home needs repairs.

If you're not sure about the condition of your home, you can ask your real estate agent for their opinion. These experts have in-house home inspection specialists who can accurately assess what needs to be repaired and how much it will cost. Once you have this information, you can decide whether to sell as-is or make the necessary repairs first.

The Square Footage

The size of the home is important because it determines how much living space there is. A home with three bedrooms and two bathrooms will be more expensive than a home with two bedrooms and one bathroom, all else being equal. In addition, extra rooms such as a home office, finished basement, or sunroom will also add to the value.

More square footage often means more value, but this isn't always the case. For example, an aging three-bedroom home might be worth less than a two-bedroom home if the latter has been recently updated with modern finishes. Some of these finishes can include stainless steel appliances, granite countertops, and hardwood floors — all of which can drive up the price.

While the number of bedrooms and bathrooms in a home is important, it's not the only thing home buyers are looking for. They also want to know about the home's layout and the space's functionality. Is the home open and airy? Or is it cramped and cluttered? These days, homebuyers are willing to pay more for a home with a good flow and efficient use of space.

If you're not sure whether your home will pass the square footage test, your real estate agent can give you a comparative market analysis. The analysis report will show you how your home stacks up against similar properties in the area. From there, you can determine whether your home is on the small side and might need renovation or if it's a good size for the current market.