You can make all the repairs to your home, clean it, stage it – even remodel it. But some of the factors that may impact the eventual sales price of your Southern Maryland home are out of your control. So, no matter how impeccably you’ve maintained the home or despite its ideal location, one or more of these circumstances can dash those dreams of earning riches at the closing table.
Let’s take a closer look at three factors that can impact your home’s value.
The condition of the current market
You’ve likely heard real estate markets referred to as buyers’ markets, sellers’ markets, or balanced markets. A buyers’ market occurs when there are a lot of homes for sale and few buyers competing for them. The buyer is in the driver’s seat, and prices tend to stagnate or fall in this type of market. When inventory of available homes is tight and there are many buyers looking for homes, that is a sellers’ market, and home prices rise.
What creates these micro-markets? There are many factors that affect national and local Southern Maryland housing markets, but chief among them is the strength of the economy. When times are good, consumers have the money to buy homes, and home prices typically increase. In tough times when unemployment is high and incomes stagnate, the real estate market feels the pinch.
Then, of course, there are interest rates. When they rise, many buyers are priced out of the housing market. When rates fall, people clamor to buy homes. Therefore, the overall strength of the economy can help dictate the eventual sale price of your home.
Your Southern Maryland neighborhood and the area around it may look nothing like it did when you bought your house. Even the most careful pre-sale research can’t foresee zoning changes, the neighbor who builds an extra story on his home and blocks your view, or the sex offender who relocates to your neighborhood. All of these events can negatively impact your home’s value and, subsequently, how much you’ll receive when you sell.
Let’s say a change in zoning allowed a dump or landfill to be placed near your neighborhood. Nearby home values will drop by as much as 7.3 percent, according to Business Insider’s Mandi Woodruff.
A power plant will ding your value from 4 to 7 percent, a sex offender as a neighbor will drag down your home’s value by up to 12 percent, and, woe to you if a neighbor forecloses because, according to Woodruff, the national average loss of value of nearby homes is $7,200.
There are some neighborhood changes you want. There’s even a name for the phenomenon: The Walmart Effect. The name typically describes the economic impact on local businesses when a big-box store, such as Walmart, moves into the area, but it’s been found to apply to home values as well.
So, if a Walmart comes to your neighborhood, rejoice! You may just get a 3 percent increase in home value, according to a study by the University of Chicago and Brigham Young University.
You’ll want to cheer loudly when Starbucks comes to town – and hope that it’s within walking distance of your house. Real estate portal Zillow found that between 1997 and 2014, the average increase in home value nationwide was 65 percent. Homes within walking distance of a Starbucks, however, saw a hefty 96 percent increase. Add Trader Joe’s and Whole Foods to the list of “please-come-to-my-neighborhood” businesses. If they do, your home may see a 17.5 percent increase in value.
Your real estate agent
Pricing a home for the market isn’t rocket science, but it’s not something that the inexperienced can do and find success. It takes years to learn how to properly research the Southern Maryland real estate market, find truly comparable homes, and take into consideration all of the various other factors that go into determining a home’s current market value. If your listing agent comes up with the wrong price, your bottom line is impacted.
Overpriced homes notoriously sell for far less than expected. Buyers’ agents know what homes in a particular area are worth, and they won’t show their clients overpriced homes. That means these homes sit on the market, the listing becomes stale, and buyers assume there is something wrong with the house.
Underpricing is also a gamble. Your agent may tell you it will create a bidding war, but what if it doesn’t? Are you willing to take rock-bottom dollars for your home?
After they price your home, the listing agent’s No. 1 job is to market your home to find the buyer who will pay the most amount of money that the market will bear. Marketing requires know-how and money. Is your agent well-positioned financially? Make sure that the Southern Maryland agent you hire has a robust marketing budget and isn’t afraid to spend what it takes to get your home sold.
You’ll pay the same amount of money for the services of an agent who gives you bare bones service as you will for the professional – so choose wisely.
White Plains MD Homes for Sale and Real Estate Services in Southern Maryland. You now have a search engine to help you with your Southern Maryland home search! And I’m ready to provide you with a custom home valuation if you’re considering selling your home. Let’s connect to discuss how I can help you. Contact Kimberly Bean at 301-440-1309