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In the real
estate industry, the concept of value is vague. The value of a house
(or condo, or co-op, or townhouse) fluctuates often, based on many
situations, such as ever-changing market conditions, the condition
of the home, and the costs associated with owning it.
For that reason, it's
difficult to answer the question, "How much is it worth?" There is
one certainty, however. The answer to true value does not lie in how
much the seller wants for his or her home (though that is what the
seller and the listing broker want you to believe). In fact, the
listing price of a home sometimes has nothing to do with its market
value.
Figuring out how much a home
is actually worth is a tricky process. You'll have to do your
homework, pull out your calculator, and spend some time learning to
recognize certain "value markers." Once you've figured out what a
property is worth relative to others that are similar in the area,
you can begin to compare various homes. Where a home is located
(within a city, within a neighborhood, on a particular street,
within a single building) is crucial to determining its value. When
you begin to compare homes, it's important to factor location into
your house valuation formula. First, think about where the house is
located in relation to the entire neighborhood. Are shops and
various services within walking distance? Is the house close to
major forms of transportation and to the schools your children will
be attending? Is it too close to any of these amenities?
A good Realtor has access to CMA (Comparative Market Analysis)
tools and can help you determine the right value depending on the
area and home prices in the last 30-60 days.
Location, Location, Location!
Many families want to be
within a few blocks of the local public school, but they prefer not
to have their backyards adjacent to the school playground.
Next, think about where the
house is located on its block. Is it on a corner, or on the interior
row? Is it next to a high-rise building or a three- or six-flat
building? Are there many homes just like it on the block? Does the
block have a nice residential feel or is it mixed
residential/commercial? If you're considering a townhouse, start by
asking yourself about the townhouse's location in relation to
shopping and service retailers, such as a dry cleaner. If the
townhouse is located within a subdivision, compare its location with
the premium location within that subdivision.
For example, is it better to
be located on the perimeter, or is an interior location better? Are
end units more prized, or are middle units preferred? Are you close
to the entrance of the subdivision, or do you have to drive several
blocks to get there? Do you have to walk far to the garbage drop-off
or mail pick-up spot? The location questions for a townhouse apply
for condominiums and coops as well. If your condo or co-op is
located in a high-rise building you also need to consider where the
unit is located in the building. If one side of the building has a
fabulous view and another faces a windowless brick wall, you can bet
that units with the full view will be more prized than units with a
peek-around or no view. Which is more important to you, the lower
cost or the better view? If there are two views -- say, a water view
vs. an urban view, an east view (sunrise) vs. a west view (sunset),
or a high-floor vs. a low-floor perspective --remember that a unit
with the best view in a building will generally appreciate faster
than a unit with only a so-so view, even if the so-so has more
amenities. |
