The value of your home (or any home, really) is determined by what buyers in the market are actually willing to pay for it. It really doesn’t matter much what you, the seller, think your home is worth – it depends almost entirely on market value. Sellers often either overestimate or underestimate the value of their home, and that’s why it’s so important for sellers to know what actually determines the market value of a home. Read on, then, to find out about the 5 factors that go into determining the value of your home in Chicago.
1. CMA/Comps
Probably the most important tool for determining the value of your home in Chicago is the comparative analysis (CMA or “comps). By means of a CMA, you or your agent can determine fair market value by looking at very similar {comparable) homes in the area that have recently sold. This will give you a fairly accurate idea of how to price your home.
The key lies in finding recently sold homes in your neighborhood that are very similar to yours – for example, with similar features, comparable square footage, similar condition and age, and so on. But that’s also where the difficulty lies because no two homes are exactly alike. Two homes, for instance, may be very similar in almost every detail, but one may be closer to good schools, which will likely make it worth more.
A CMA is a very valuable pricing tool, but it takes some skill and experience to get it right. So be sure to contact your Chicago agent for help with a CMA. To discover more, just call 773.233.2301.
2. Location
You’ve heard it often enough. The value of your home in Chicago is determined primarily by three factors: location, location, and location. That’s usually said a bit tongue in cheek, but there remains a lot of truth in it.
According to industry experts, “[y]our property’s proximity to everything from local amenities to local highways will all dramatically affect the value of your home. Oftentimes, the property’s proximity to a body of water, tourist destinations, city centers, and public transportation options also determine how popular a location is for potential buyers. In addition, an area’s crime stats (i.e., the neighborhood’s safety record) may also influence the value of your home. Of course, the city’s housing market – and state of the market, in general – will affect the value of your home.”
When it comes to the pricing influence of location, then, the best course for most sellers is to rely on their agent’s expertise. For location will affect the value of your home differently in different markets.
3. Square Footage and Yard Size
And then, of course, square footage and the size of the yard will play a large role in the value of your home in Chicago. Typically, a larger home is worth more, but there are exceptions.
Here’s what the pros say on this: “The size of the home (and outdoor space) is an important factor in determining the value of your home. When pricing your home, [agents]bwill want to assess the number of square feet (particularly ‘livable’ square feet) in a home. The price per square foot is determined by [several factors], as well as the acreage of the lot and the quality of the landscaping. If the home has a dilapidated yard or – at the very least – one with room for improvement, then sellers may want to factor this into their pricing decision.”
4. Upgrades and Renovations
In determining the value of your home in Chicago, you’ll also need to factor in any upgrades or renovations. Generally, buyers will pay more for homes with upgrades such as hardwood floors and custom-made kitchen cabinets, and even smaller things like new light fixtures.
And don’t neglect to factor in any upgrades to the home. “[R]enovations and upgrades should be considered when determining the value of your home. How much did the renovations cost? Assuming you didn’t over-improve the home, you should be able to include the majority (if not all) of the upgrade expenses into your calculation of the home’s overall value. Of course, some renovations typically yield a greater ROI than others. Several of the most valuable home improvements include a kitchen or bathroom upgrade, an upscale garage door addition, an outdoor deck addition and an energy-efficient window installment.”
5. General Condition
Location, size, and upgrades aren’t the only considerations. The general condition of your home has to be factored in as well when you’re trying to determine the value of your home in Chicago.
Obviously, a run-down, dilapidated home won’t be worth as much as similar homes in the neighborhood that have been kept up – “even if the home is large and located in a highly coveted neighborhood. When calculating the value of your home, be sure to consider the overall condition of the home. Remember: just because a home is old, doesn’t mean it’s worth less. In fact, an aging home that has been well taken care of is oftentimes worth just as much (if not more) than a new build.”
Use Your Agent to Determine the Value of Your Home
For most sellers, especially those with little selling experience, the best course is to rely on the expertise of their local agent. Your [market city] will know the local market and exactly how to determine your home’s value in that market. So if you want to accurately determine the value of your home in Chicago and price to sell, contact us today at 773.233.2301.