What Determines the Value of Your Home?

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Basically, a home's worth is determined by its market value. How is "market value" determined? Most often, it's figured by a comparison ("comp") with homes similar to yours in the surrounding area. So, if the homes in your neighborhood average, say, $250,000, then it's likely that the value of your property will fall in the same range. But market value is also determined by a number of factors including the following: 

External Factors 

There can be several external factors influencing the value of your home. One is "curb appeal", or the first impression your property makes upon prospective buyers. A home that's in excellent condition on the outside will make a great first impression; a home in poor repair instantly loses its appeal to buyers. Other factors can include lot size, popularity of an architectural style of property, water/sewage systems, paved roads, sidewalks, etc. 

Internal Factors  

The condition of a home's interior also has a huge influence on prospective buyers. When you've demonstrated "pride of ownership" and kept up the maintenance (quality paint, trim, molding, etc.), a buyer's interest will immediately perk up for the simple reason that they know your care and concern will result in less cost and maintenance for them. Other internal factors include construction quality, condition of appliances, size and number of rooms, heating/cooling type, energy efficiency, etc. 

Supply and Demand 

"Supply and demand" simply refers to the number of homes for sale versus the number of buyers. When there are more homes than there are buyers, prices tend to be lower. When there are a lot of buyers chasing few homes, then prices tend to rise. In effect, supply and demand affects how quickly your home will sell. Location More than likely, you already know the old saying, "There are three main factors in real estate - location, location, location." While that's not the whole story, desirability is a big factor for home buyers. They may want to live in particular school district known for its education excellence…a great and safe neighborhood with rising property values…etc. 

But I Know My Home Is More Valuable Than a Lot of Comparable Homes in My Neighborhood  

Aren't Allowances Made for This? Definitely! Sometimes, it can be difficult to find homes exactly comparable to your own. So, dollar adjustments are made for the differences between your home and comparable properties. 

Where Do I Find Sales Comparison Information? 

The easiest source to access is your Realtor. After all, it's his or her business to know such information! But, there are also other sources you can tap into in order to get a complete picture of your home's value in comparison to others in your neighborhood. Here's an overview of them:

1. ) The Local Assessor's Office  

It's very likely that your local assessor will be able to provide the sales history of a particular house, neighborhood, or style of architecture. Many assessors also provide lists of recent sales which you can browse and compare to the assessment roll. Today, many municipalities provide local sales and assessment information online making it very easy to access. Check with your local government agency to find out if they provide this service. 

2.) Online Private Companies  

You can search for these companies using the Google search engine and the keywords "comparable home sales" or "comparable sales." Some companies offer free information; others charge a nominal fee. If you wish to get more specific, you can Google "real estate database" and type in the name of your particular state to get additional property information. 

3.) Your Local Newspaper  

It's likely that your local newspaper is a great source of specific real estate information. Look for quarterly sales reports in the real estate or business sections.

The Key to Getting the Price You Want (or Close To It) for Your Home 

The key to getting the best value is finding and matching the right buyer to your home. And that's the job of the Realtor! He or she should work hard to qualify those buyers upfront so the right people are viewing your property! In other words, the Realtor should weed out "lookers" and other unsuitable buyers as a first step in working with you. See how I do that for you by calling me today!

Selecting the Best Contractor for a Home Improvement Project to Increase the Value of Your Home!

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Whenever selecting a contractor for a home improvement project, ask first for word-of-mouth recommendations by family, friends, neighbors, or business associates.

This is the acid test. Great contractors know that personal recommendations are the absolute best method of gaining new business and will work hard to make sure their reputation is sterling.

By the same token, poor contractors or scam artists hate word-of-mouth because it exposes their incompetence and lack of ethics.

If personal recommendations aren’t available, ask the contractors for references and then check out three or four of them.

Again, great contractors will be eager to provide you with these contacts because it means more business. On the other hand, poor contractors or scam artists will either refuse to give references to you or play down their importance.

But, don’t stop at checking references! Also, check out the contractor’s personality. Can you work easily with him or her? You want a person who will listen to your suggestions and do their best to incorporate them into the job. If the contractor is abrasive or dismisses your suggestions, choose another one!

Here’s another suggestion: If a contractor tries to bully you into signing with him or her with a big price drop at the last minute, simply tell them, “I’m going to get other bids and compare them, so just give me your best price now without the price drop.” If they don’t agree to your suggestion, tell them to take a hike.By the same token, don’t work with a window, siding, etc. contractor who tries to get you to change what you want to put into your home.

Often, this means that they’re only comfortable installing the product they normally deal with and want the easiest job possible. Again, it’s your money and you’re the boss, so insist on the product you want.

Finally, don’t let contractors make misleading product comparisons. They should be able give you an informed opinion on, say, the difference between the performance of old siding and new siding and the difference in costs between the two.

However, those comparisons should never lead to a product that more expensive than your budget will allows or isn’t really appropriate for your home.

The bottom line – with contractors, you should get straight-forward honest bids with no surprises! To learn more about how to deal with contractors, contact me today, and we can talk dollars and “sense!” 

Tax Tips for People Looking to Invest In Real Estate

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It comes as no surprise to most of us real estate agents that so many people today are delving into the realm of property investment.  Today’s great value in terms of low prices, coupled with the unprecedented affordability factor that today’s interest rates provides – makes it almost a foregone conclusion that investment activity will be on the rise.

Despite a challenging economy with less than to be desired jobs rates in most states, more and more buyers are getting into property buying as a long term investment.  In fact, even world-renowned investor Warren Buffett has recently stated that real estate is among the strongest asset class right now.

Here are a few things to think about when considering property invesments:

Local Tax Auditor – Great Resource for Tax Values

If you are looking for preemptive tax values one of the best resources is your local tax auditor. Contact their office and share with them your intended use for the property in question and you will likely find out what kind of tax payments or implications you will be looking at.  They will also be able to confirm whether or not you will be considered owner/occupant status or otherwise and provide you with useful information about what taxes you can expect.

Homestead Tax Exemption for Seniors and Disabled Citizens

Until 2007, there were income level requirements that hindered the eligibility for the Homestead Tax Exemption for many homeowners.  But after the program was expanded the benefit became available for anyone 65 years of age and older or permanently and completely disabled individuals.  One other key change that was made was to include a flat $25,000 property tax exemption amount on the value of homes meeting eligibility requirements.  For more information on this program, visit the Ohio Department of Taxation’s Homestead Exemption frequently asked questions page. During your search for your investment property if you are looking for something that would qualify for this exemption, contact your auditor’s office to find out the amount of projected taxes for that property.

Investment Property Vs. Owner/Occupant Homes Taxed Differently

Most people new to investing in real estate do not realize that property taxes vary depending on the type of ownership involved.  If you are looking solely to invest in a property rather than use the home as your primary residence, then the tax implications will be different for each.  It is important to meet with your Realtor to discuss the potential differences in this regard to get as much information as possible about the expected property tax amount.

Land Used for Farming Is Taxed Lower Than Other Properties

The Current Agricultural Use Value Assessment in Ohio is a program designed to allow farmers the benefit of being taxed based on the agricultural value of the property as opposed to the full market value.  Typically this translates to a lower tax rate for those property owners.  During the transfer of property in these cases, if the new owner intends the land for development use then often the CAUV tax does not apply.  Additional tax implications for the new owner will ensue, so it would be worthwhile to consult with the tax auditor to find out what you may be dealing with.
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This is a great time to buy real estate.  Whether you are getting into your first home or moving up to seize the affordability factor and buying a better home for nearly the same monthly payment – this could not be a better time.  Equally, investors are popping up all over the place.  In as little as seven or eight years, the property you invest in today will likely bring a good return – reason for many Americans to buy property nowadays!  If you would like further assistance with your real estate endeavors or seek additional information about the tax considerations in this article, contact us today!