The worth of a house is important when the homeowner is looking to sell, refinance, or qualify for secure credit such as a Home Equity Line of Credit (HELOC). The truth is, determining how much a house is worth is not an exact science and many factors are to be considered. A house's worth boils down to what a buyer is willing to pay for it. However, we have made note of a few of the factors that can impact the worth of your house below:

#1 - Age of the House and Condition

Considering the age of a house is very important because this will determine what kind of repairs the house will need in order to get it ready to sell, a loan refinance, or a HELOC. Typically, the older the house the more expensive the repairs will be and the less the house is worth. For example, a house built 50 years ago might be livable, but it may need a new AC Unit, new roof, new windows, new electrical, new plumbing, renovated bathrooms, kitchen, flooring, and in many instances new drywall, to keep the structure up to date. On the other hand, a house that was built within the last five years may just need a cosmetic repairs such as a paint job, new carpet, and some gardening. The cost of renovation for an older house is significantly higher.

#2 - Location of the House

The location of the house is a critical factor in determining your house's worth. If your house is located in a high demand location such as New York City or San Fransisco, then your property is in high demand since space is limited and comes at a premium in these cities. Your house will be worth much more in a big city than if it were located in the middle of nowhere North Carolina. In addition, your property's worth will be enhanced if it is located near good schools, shopping centers, jobs, and public transportation.

#3 - Square Footage of the House

The bigger your house is the more it will typically be worth. However, you must contact your local government to find out whether they allow additional square footage in basements or additions to be counted towards the value of your home. Some local governments do, but many do not. This will impact the final worth of your home. For example, if your house is 2,800 square feet including 500 square feet in the basement at $100 the square foot you could sell your house for $280,000. However, if your local government does not allow the square footage in basements to be counted then your livable square footage is only 2,300 at $100 per square foot for a price of only $230,000, a $50,000 difference.

#5 - Functionality of the House

The discussed factors are taken into consideration in aggregate to better understand a property's worth. Some factors weigh more than others depending on the real estate market you are in. It is important to understand that a house's worth is not an exact science and boils down to what a buyer is willing to pay you for it. To gain a better understanding of your market conduct a Comparative Market Analysis, CRM, which considers all of the factors we discussed here and applies it to houses similar to yours, located within 1 mile radius, that were sold within the last 30 days in your area. When performing a CRM ensure you are comparing apples to apples.

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