The market value of your home is an important financial figure for you to keep track of. While the government assigns a rate that they use for taxes based on home value, the market value is highly dependent on what people think of your home. When it comes to perception, having your home in good repair and looking pristine can play a huge role in what people think your home is worth.
Cost to Repair
Repairs are usually made as needed on a home, but that doesn’t mean there aren’t things that need to be repaired that you don’t know about. Some people may not use or care about a specific feature, so they don’t repair or maintain it. If your home needs a lot of repairs, even if they are all small things, that can actually drive the value of your home down. The perception is that your home is more run-down and will cost more to maintain than a home that doesn’t need repairs made.
Cost to Update
Even with the best maintenance, there are things in your home that will need to be replaced or updated regularly as they wear out. These tend to be the major systems of your home, such as the plumbing, HVAC, roof, or electrical system. Updating or replacing those systems within the last few years can add a lot of value to your home, especially if you are looking to sell. A newly updated or replaced system shows that the new owners don’t need to worry about this area of the home. It usually also comes with a transferable warranty, which also adds value, because the work has been guaranteed.
If you are looking to sell your home, the state of your home has a fairly large impact on the price that you can ask for. You can choose to make repairs, negotiate with the buyer over repairs, or sell your home as-is. In the traditional real estate market, selling as-is doesn’t command as much value, and can actually lower the offers you receive. If you choose to sell your home to a home-buying company, you actually shouldn’t make any repairs. They buy homes as-is. And unlike a traditional sale, they actually look at the value of your home, rather than letting the idea of no repairs lower the value. Their cash offers are based on facts, rather than perception.
When considering the market value of your home and whether you should make repairs or not, it can be helpful to consider the cost of the repairs in proportion to your home value. Making repairs can be helpful when selling your home, but it isn’t always the wisest choice.
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