FINE & COUNTRY
The value of a home and its marketability are two different things. Jonathan Handford from Fine & Country Leamington Spa discusses the factors that determine both and how they influence the selling price of a property.
The first distinction sellers need to make when listing a property is the difference between the actual value of their home and its current marketability. A lot of elements come into play when determining a home’s value, just as there are aspects that impact a home’s marketability in any given economic environment or market.
While the value of a property is determined by looking at things such as the structural elements, including the size, features, age and configuration, marketability is about the readiness of the property to be sold. It relates to aspects such as the home’s condition and aesthetic appeal.
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VALUE The value of a property is largely determined by supply and demand in the market, along with buyer’s preferences. When demand for property is greater than the supply of available properties, the perceived value of property in general increases. The opposite is also true, in that when there are a lot of homes on the market, but fewer buyers, home values can stagnate or sometimes, dip. There is a clear link between property prices and demand and it’s important to remember that the value of a home is not established by the seller, but rather, the prospective buyer. Essentially what this means is your home is only ever worth what a buyer is prepared to pay for it in the given market.
It is important to note, too, that while renovations or alterations to a property can impact buyers’ perceptions, this doesn’t always translate into an increase in the value of the property. Trends, the quality of renovation, and the impact alterations have on a home all impact the price the property will attract. For example, a few seasons back, feature walls painted in a different colour were a popular trend. Currently, though, these are no longer in vogue and many buyers see them as something that needs to be ‘fixed’. Naturally, that affects the complex price calculations in a buyer’s head.
In another example, a new kitchen or a bathroom upgrade will make the home more attractive to buyers, but it doesn’t always mean they’ll be willing to pay higher price that is the equivalent
BETWEEN VALUE AND MARKETABILITY to the cost of the renovation.
Likely return on investment is therefore a necessary consideration before undertaking renovations. If the renovations are not on trend, or if the owner has overcapitalised and made improvements that go beyond the value the neighbourhood dictates, it will have a negative influence on the property’s saleability. Not every buyer will pay more for an impressive wine cellar for example, when they don’t have a wine collection and can purchase a similar home in the same area without one. In this case the addition is unlikely to reap rewards. On the other hand, in a family-oriented neighbourhood where the majority of properties have a swimming pool, a property without a pool may be viewed as less valuable.
MARKETABILITY The marketability of a home is largely determined by how ready it is to sell. Preparing a home before it is listed increases its marketability and ensures it attracts a greater number of potential buyers. Essentially, increased marketability can result in the seller achieving a higher price for the property. If a home is clean, neat and well-maintained, it will be far more appealing to prospective buyers. Marketability, then, is all about a prop- erty being in the best possible condition for that property, before being placed on the market. Adding a coat of paint and having the garden landscaped won’t necessarily increase the home’s value, but it will increase its marketability and make it appealing to a larger number of potential buyers,
despite the features of the home being unchanged.
Staging the property also impacts marketability. All of those tips around de-cluttering and presenting a home in a neat, yet neutral, way are about marketability. The higher the marketability of the property, the more opportunities there will be for securing a buyer who sees the home as having a higher value.
Both value and marketability are important when putting your property on the market. Balancing the factors that increase the value and enhance the marketability ensures that buyers can maximise their potential selling price and stand apart from the crowd in a competitive market.
For advice on selling or buying property, please contact Fine & Country Leamington Spa on 01926 455950 or visit
www.fineandcountry.com
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THE MIDLANDS PROPERT Y GUIDE F INE & COUNTRY
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