Selling your house can be a huge headache—especially when you're selling it in today's buyer's real estate market. One of the most challenging aspects to deal with is determining your home's value. When it comes to fixing a fair price, homeowners always shoot high. After all, you love your house and you know how much work you've put into it. Won't someone else appreciate it as much as you do?
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The short answer is no. An experienced real estate agent will take the emotional factor out of the equation and help you come up with a realistic market value for your house. But if you want to sell your house yourself without a realtor—or you just want to be prepared for the number they advise—here are five factors that can heavily skew the asking price of your home.
1. Location
We've all heard how important "location, location, location" is, and with good reason. A great house in a bad location can knock as much as 50 percent off the value. If you have the nicest, most expensive house in your average neighborhood, then the value is also going to be much lower than it would be if you had the least expensive house in a nice neighborhood. Other factors, like freeways, proximity to a landfill or sewage treatment center, and train tracks, can knock 10 to 15 percent or more off the value of your home. This is why it's so important to shop location first when you're buying a house; you can always add home improvements, but moving it to another neighborhood isn't going to happen.
2. Outdated Rooms
If your fridge is more than 15 years old and your oven isn't black or stainless steel, then count on listing your house lower than you'd be able to if you had a fully updated kitchen. With the influx of homes on the market right now, people can easily get a home that doesn't need any updating, so why would they choose one that does? If you don't want to update your home in order to sell it, know that outdated rooms can affect the value of your home by up to 10 percent.
3. Renters
Many people don't want to own a home surrounded by rental properties. Although it's a stereotype, tenants often don't keep up the property like an owner would. In this case, the value of your house can go down as much as 15 percent, depending on how many rentals are in close proximity to your home.
4. Major Upgrades
In this market, don't count on getting more for your home if you just upgraded the plumbing, bought a new furnace, or replaced your roof. However, if your home does need those upgrades and you haven't done them, then it's going to knock as much as 20 percent off the value of your home, depending on how severe the upgrade is. Buyers simply don't want to shell out for major upgrades - especially when there is a large pool of other properties to choose from.
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5. Fencing
Most people looking to buy a house have kids or pets. If your home doesn't have a fenced backyard, you're going to alienate a huge portion of the market since fenced backyards are essential for keeping kids and pets safe and contained. Not having a fence can knock up to 10 percent off your home's value.
Final Thoughts
Although many of these factors, like location and proximity to renters, are out of your hands, there are plenty of things you can do to increase the value and appeal of your home. For instance, buyers almost always choose light and airy homes over dark ones. Therefore, it's beneficial to do whatever you can to bring a sense of light and space into your home. Other factors, such as fresh paint and a tidy lawn, make a great first impression as well. The important thing is to be realistic when deciding on a price for your home so that you can move it off the market as quickly as possible.
If you've sold your home before, what are some of the biggest factors that impacted the final selling price?
Heather Levin is a contributor for the Money Crashers personal finance blog and frequently writes about issues like saving money, real estate, home improvement, and frugality. Additionally, Heather blogs on The Greenest Dollar about green living and saving the environment.
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