Appraisals are determined by a variety of topics. This article won’t make you a appraisal expert but rather give you the leading factors of what your home is worth. In Michigan, especially the metro Detroit area, the real estate market has been booming like the rest of the country and selling your home is a major decision. Here we give you some tools to determine your rate of return on your biggest investment: your home.
Location
Outside the actual physical features of your home, location greatly affects how accessible buyers are to desirable amenities in the area. For example, a couple with a young family will closely examine the local school districts or a downtown commute. Having access to mass transportation, shopping centers or a desirable downtown area, like Royal Oak or Birmingham, will greatly affect how much someone is willing to pay for your home.
Square footage
One of the major appraisal factors for your home is the square footage of your Michigan residence. There is an important difference between the square footage of the home and the amount of livable space. For example, a finished a basement may not add to the overall square footage of the home. In most appraisals, livable space only refers to the space above ground. Not to say that the refinished basement will not add value to the home, A finished basement is a desirable factor for home buyers. Especially with current home trends, a finished basement is highly sought after for a space for kids to play or a home office.
The trending real estate market
The current trends for the real estate market are the top factor in this list, as of this publication. As you may already know, there is a major housing shortage and buyers are willing to forgive a lot of factors, such as outdated homes. With COVID affecting the market, many experts says that the real estate bubble may be short lived, and many others say that the housing shortage is going to around for a long time. If you were shopping for a residence in the early 200s you would have seen the opposite market. During this time, in metro Detroit, you could buy homes by the block.
Also, there are local factor that are influential as well. A recent press release by Michigan Governor Whitmer announced a revitalization of the metro Detroit area. This proposal plans to take COVID relief dollars and invest it into affordable housing and renovating other parts of the city of Detroit. As discussed in an earlier blog post, there are many questions as to how this will affect the house prices.
How updated is the home?
One of the biggest selling points is when a buyer enters a residence to find an updated home with recent renovations and the smell of new construction. Buyers will pay top dollar for home that require no updates and is move in ready. Check out these top renovations from 2021 Cost vs. Value Report from Remodeling magazine.
- Garage door replacement:
- Average cost: $3,907
- Average resale value: $3,663
- Cost recouped: 93.8%
- Manufactured stone veneer
- Average cost: $10,386
- Average resale value: $9,571
- Cost recouped: 92.1%
- Kitchen remodel
- Average cost: $26,214
- Average resale value: $18,927
- Cost recouped: 72.2%
- Fiber-cement siding
- Average cost: $19,626
- Average resale value: $13,618
- Cost recouped: 69.4%
- Vinyl windows
- Average cost: $19,385
- Average resale value: $13,297
- Cost recouped: 68.6%
Garage space
Having a bigger size garage (more than two cars) or even having a garage space in general will increase the value of your home. Garages are not only used to store vehicles but other things as well, like storage space for tools or a small working area. This makes a difference given the lot size and if regular grounds maintenance is required.
Heating and cooling
Most Michigan homes come with a heating source but what about air conditioning? Many home shoppers don’t want to have window air conditioner units that take up space, are noisy, and non-efficient. Having a central air conditioning unit makes the home more desirable and a 35-50% ROI.
Comparable homes
This is most important tool to an appraiser and ties in all the factors listed above. When an appraiser enters your home, they account all the updates, square footage, bedrooms, bathrooms, and etc. This number is then compared to comps in the area, meaning homes that are the most similar. Then they take the average sale place (the more recent the more relevant) and you have the ending result of your appraised value.
Keep in mind that this is a regulated practice, and you must go to school and be certified to be an official appraiser. With that being said, you can get a general idea of your home value by going to Zillow or other real estate sites and examining recently sold homes.
If your think about selling your home and need to sell your home fast, then give us a call! We are local in the metro Detroit area and buy houses with all cash offers. Were known for servicing people who need to sell their home as-is and with an all-cash offer. No need for real estate agents, closing costs, or even appraisals. When people give Anderson Home Paths a call, they can expect timely service and great deals minus all the headaches of selling a home. Give us a call today and see why we are the leading “we buy houses” company in the metro Detroit area.