How much is your home really worth in today’s market?
Wondering how much your home is worth? For most of us, it’s our biggest asset so it makes sense that we want to keep an eye on its value.
Jonathan Charles from Independent Woden says he often gets people asking for an appraisal even if they have no plans to sell. “Knowing what your property is worth is useful for a variety of reasons,” he says. “It means you know how much equity you have in the property, which you can leverage to buy an investment property. It’s also useful if you want to renovate but you don’t want to spend more then you’ll get back if you sell later.”
Of course, a property appraisal is also your first step if you are thinking of selling. “It really helps clarify your options,” says Jonathan. “You might want to buy somewhere bigger, or relocate for a job, or free up some cash and downsize once the kids have moved out. An appraisal gives you a good idea of how much you’re likely to get for the property, and you can build on that foundation.”
Since market conditions are always changing, property appraisals should be kept up to date. “We look at the comparable data,” explains Jonathan. “Sales from the last 30 days are a much stronger indicator of price than sales from a year ago, so it’s a good idea to refresh your appraisal if you haven’t got one in a while.”
What really determines what a home is worth? There are several factors, and it can be hard to know how to balance them.
“Location is a huge one,” Jonathan says. “Inner city and city fringe suburbs are always popular because they’re so convenient for workers. For family homes, school zones are another big drawcard. I’ve seen houses on one street go for as much as $30,000 more than an almost-identical house one block over, just because it falls in a desirable school zone.”
Proximity to public transport, shops and infrastructure are all additional factors that will get the buyer buzzing, and a good agent will highlight those in an appraisal.
The size of your home will also significantly affect its price. That includes the size of the block as well as the overall living space. “A small house on a large block could be attractive to developers as well as people who value a big garden, so it’s worth more than the same house on a smaller block.”
Number of bedrooms, additional living spaces, ensuites and alfresco areas all make your home more desirable and therefore up the price. An agent will look at all these things when comparing it to similar properties.
The third major factor is the condition of the interior. Is your home newly updated and ready to move into? Or will it need some work by the buyer?
“Buyers mentally price in any extra work they’ll need to do,” explains Jonathan. “If the kitchen is looking tired, and they think they’ll need to spend $15,000 on updating it, that $15,000 comes off their spending budget. If your kitchen is brand new, however, buyers will usually be happy to pay more to just move in and enjoy it.”
Balancing these factors is where it gets really tricky. Is a large house in need of some love worth more or less than a smaller one with a brand new upscale interior? How much is that view really worth?
“Character homes can be tricky to appraise. You really want an agent with experience and skill set in that type of property,” Jonathan says. “It’s not just a matter of looking at similar properties, like you would if you were selling a unit in a large development. You need to really know your market. We conduct buyer research evenings where we can really drill down to what buyers want and what they think a property is worth. Then we can take that knowledge forward to future properties to give sellers as accurate an estimate as possible.”
If you want to find out what your home is worth, an appraisal is the best way to go.