Understanding what fair market value is and where your property lays is essential.
People often think that calculating the fair market value of their property is something that is done when selling your home. However, they could not be more wrong. Understanding and being aware of the value of your property is always essential. Why? We explain the various reasons down below. By the end of this text, you will have a better understanding of what fair market value means and why it is important to understand the context of it.
What is Fair Market Value?
The notion of fair market value simply conceptualizes the value of a property in the current market. It provides an estimated average of how much something might be worth in combination with how much the buyer is willing to spend on the same. In addition, it enables buyers and sellers to be ‘in the know‘ and to better understand the real estate habits of the market. Understanding different values as the time changes can also aid in understanding and predicting how values and prices may and will fluctuate.
How does one calculate the value of their property? Once again, do not wait until you are selling or buying a property. It is good to know ahead and be aware of what the average prices are. In order to calculate how much your property is worth today, first collect the necessary info:
- Where is your property located?
- How old is the property you own?
- What is the average value of properties similar to yours?
As simple as that. Once you determine what the average prices are within your surroundings and what similar properties are valued at, you can then begin to estimate how much your property would be worth in the market today.
Fair Market Value is the value of your property based on the average of comparable properties.
If you know the fair market value of your property, then you should also know that it is not a number that cannot be altered. There are ways to better the estimate or average and, in the end, bring the value of your property up. For example, if your calculations evaluate that your property’s value is lower than the average within your location, there are ways to improve that. Whether it is altering the interior aspects of your property, or completely improving the look of the landscape and outer territory, it is all possible. Moreover, with a few fixes here and there, your property can go from 10 to 100.
First impressions and appearances do go a long way. A well-furbished property that is taken care of can make a huge impression for a potential buyer. Furthermore, a good first impression and an appealing appearance create a positive experience for viewers. It can also be the dividing point between making or breaking a sale.
If you think about it, a put-together property does make a difference. Imagine you are viewing two homes within the same neighborhood. Although their set up and built is identical – one home is almost empty, old paint on the walls, and stale atmosphere altogether. Meanwhile, the second home has a fresh breeze throughout its interior, walls are freshly painted, and the furniture is perfectly set up to accentuate each room. Which property gave you a more positive experience? Clearly the second one. Hence, more of a chance that you would show interest in the second property.
Visual aspects are therefore very essential. They make a difference, and they ‘make’ the sale. In the next paragraph, we will analyze a few fixes anyone can do to improve the value of their property.
Make Your Property Stand Out
Most of the time, when selling your property, you are trying to gain a profit out of it or at least break even after the fact. Otherwise, what is the point? Improving elements of your property can make the difference within the value scale.
Meet Me in The Kitchen
You might be wondering which room in the house you should spend the most time and dollars on? The answer is your kitchen. Elements such as new cabinets, or even just new paint over the existing ones, a chic backsplash and brand-new appliances can change the entire look of your kitchen. Also, if the structure of your house allows you, break down the walls which divide your kitchen from the rest of the house and create an open space concept. A kitchen is one of the most obvious selling points, hence improving the value of your property can result in a quicker and more profitable sale in the end.
Another aspect which has the power to make a difference is the square footage. How can you improve on this? Use the space your property has to offer! Don’t forget about the value of a basement that could be unfinished, however easily fixable. Do you have an attic? You must ensure to use even the smallest of spaces on your property as space matters – the bigger the square footage, the greater the value.
Furthermore, maybe your property simply requires the easy, affordable fixes. Fresh paint on the walls can create a cohesive atmosphere throughout the house. Lighter colors also have the power to open a room and make it seem bigger. Reuse your old furniture but add a few new accent pillows to add personality to the overall look. Finally, remember to ensure all appliances are in working condition.
Sell, sell, sell!
If you find yourself within a selling situation, you must prepare your house for this role as well. As mentioned above, buyers like an open space. Even though they like to see furniture accenting every room, they also want to be able to imagine their own furniture within a potential new space. Therefore, don’t hoard your items. If you already know you are moving, then transporting household goods would be a good idea to free up some space.
Hopefully, now you have the essential information to understand the fair market value a little bit better. Evaluate your property and calculate its value. Based on the results, you can decide which route to take in order to improve it. Whether your property is already at a value it should be at, or it needs a little work, at least you understand its value and now know how to go about it.