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Real Estate 101

Before you put your home on the market, there are some things you can do to differentiate your house among the competitors. When preparing to put your home up for sale, your first concern is the home's exterior. If the outside, or "curb appeal" looks good, people will more than likely want to see what's on the inside. Keep the lawn and landscape nicely manicured. Trim the bushes and season permitting, plant some flowers. Be sure your front door area has a "Welcome" feeling. A fresh coat of paint on the front door looks great.

Of all the rooms inside your home, pay special attention to the kitchen and bathrooms. They should look as modern, bright and fresh as possible. It is essential for them to be clean and odor free. A fresh coat of paint just may do the trick. Have any leaky faucets taken care of. A call to a plumber is a wise investment.

Since you want your home to look as spacious as possible, remove any excess or very large furniture. Make sure that table tops, dressers and closets are free of clutter. Don't use your garage, attic, or basement to store these extra things. These areas also need to have the impression of space. Instead, put them into storage. Make sure walls and doors are free of smudges and look for anything that might indicate a maintenance problem, such as cracked windows, holes in the wall or stained ceilings.

Finally, if your basement shows any signs of dampness or leakage, seal the walls.

Quick tips for showings:

  • Keep counter tops cleared
  • Replace all burned out lightbulbs
  • Open all drapes and window blinds
  • Put pets in cages or take them to a neighbor
  • No dirty dishes in the sink
  • No laundry in the washer/dryer
  • Clean or replace dirty or worn carpets
  • Put on soft music
  • Burn wood in the fireplace on cold days, otherwise, the fireplace should be clean

Always look at your home from the buyer's point of view. Be objective and be honest.

How Is a Property Value Determined?

It’s a total of the land worth plus any improvements made to the land. Those improvements can be anything from your house – the most obvious – to sheds, fancy driveways, tennis courts, pools, even landscaping.

As for the land, its size and location and its ability to be developed are determining factors. If it’s too hilly or sandy, making it difficult to build on, it likely will be worth less. If it’s in a desirable neighborhood, it’s going to be worth more. If it’s near shopping, that can be good. If it’s too close to shopping centers and traffic, that can lower the value.

Keep in mind, too, future zoning plans. A home may have a higher value when it’s first built and has wonderful green-space views. But if zoning allows for that green-space to turn into a shopping mall 10 years down the road, you can expect the home’s value to decrease when the view changes to delivery trucks and parking lots.

All the components that make up a property’s value are given values based on comparable properties in the neighborhood. For instance, if you live in a strictly middle class neighborhood and add a tennis court – the only one in your whole neighborhood – an assessor (or current buyers) may not really see it as a valuable addition – at least not valuable enough to pay a premium for the home – since most people moving into a strictly middle-class neighborhood would neither expect nor want a tennis court in their yard.

How Is a Home's Market Value Determined?

What are you willing to pay? That’s often the market value. But in reality, the market value is what your house is worth on the open market - what are people paying for homes similar to yours.

If somebody grossly overpays for a property, that doesn’t mean that sales price is its real market value – not if similar homes in the neighborhood are not selling at the same price. Likewise, you may get a real steal on a house, but an assessor may not see it your way – he’ll say that other people are paying $20,000 more, for instance, for the same type of house in your neighborhood – so your taxes are going to be based on the real market value, not what you paid.

To decide what to pay for a home (or what to sell yours for) it helps to look at comps – the recent selling prices of nearby homes that are of a similar size, age and condition. Be sure to look for homes very near to yours, not similar homes in different neighborhoods. Everything in the area – from proximity to shopping, quality of schools, crime rate and general neighborhood upkeep – figure into the market value of any given home.

What Can Negatively Affect House Values in My Area?

Plenty of things can lower home values in any given neighborhood:

Condition of the houses. Do your neighbors maintain their homes well, or are their lawns overgrown with weeds and their yards full of junk cars and decrepit appliances?

Condition of the streets. Does your city/county/homeowners association maintain your streets well, or are they pocked with potholes? Do they drain well during spring rains? Are they plowed frequently enough in the winter? Are there sidewalks or bike paths?

Crime. How does crime in your neighborhood stack up with rates around the city? Are the police responsive to problems? Do you have a Neighborhood Watch in place, showing that neighbors work together and take crime seriously?

Schools. How are test scores in the schools where your neighborhood’s kids go? (Remember, with constant school redistricting, sometimes the school around the corner is NOT the one where kids in your area go; they may have to go to another school.) Are the schools overcrowded? Are they old and in need of repair or expansion or updating? Are there discipline problems?

Zoning. Will all the neighborhood streets remain quiet, or does the city or county have plans to widen streets to accommodate more traffic – using your neighborhood as a path from one side of town to another? Will that block of decrepit homes nearby be redeveloped into pretty new houses, or will your city put a strip mall or convention center or low-income apartments there?

Home Appraisal vs. Assessment:

What is the Difference?

An appraisal is something you pay for. An assessment is something the government does, whether you want them to or not.

An appraisal typically is ordered by a home buyer’s mortgage company to confirm that the value of a home matches the value on the mortgage application. A bank doesn’t want to give you a home loan that far exceeds the actual value of a house.

Homeowners will sometimes pay for an appraisal if they’ve made improvements to their home. This helps document the new, increased value and makes it easier to qualify for a home equity loan.

The government – usually the city or county in which your home is located – assesses the value of your home to determine how much property tax you’ll pay. Most governmental agencies do assessments every two to four years, but the time span varies from area to area. In some places, you’ll never know your house has been reassessed; government officials base their assessments on property sales records, size, age, condition, location, and other factors. In other parts of the country, you’ll receive a notice in the mail saying the government’s property assessor wants to look inside your home to see if you’ve made any improvements. Every governmental agency offers a window of time in which you can dispute any assessment. Being governments, they rarely make the process easy, but many people have successfully managed to get their assessments, and thus their property taxes lowered.

On the flip side, some homeowners WANT to see an increased assessment to prove their home has more value – either due to an impending sale, plans for a home equity loan, or to protect their investment.

If you think your property has substantially decreased or increased in value, you can request an assessment. But just remember that a higher home value almost always means higher property taxes.

The Wood Team

Wood & Associates Real Estate, Inc.   /    Wood Builder, Inc

1001 S Bloomington Street, Suite 201, Greencastle, IN 46135

765-653-6774 (office) * 888-710-WOOD (toll free) * 765-653-4140 (fax)