Whether you’re looking to sell your home or are thinking about the future, it’s always important to know how to find and how to boost the market value of your home. For your current home, you can go big, such as adding another room onto your floor plan or go small, like planting a few flowering shrubs. But did you know that you can start thinking about boosting your home’s potential value before it’s even built?
In terms of new construction and custom homes, it’s all about the design. For example, a home designed by an architect usually has a higher market value than those that are not. As architects for new custom homes and renovations, we’re experts in this area and we wanted to share our knowledge with you.
But before we jump into things, it’s important to understand how a home’s value is calculated.
How is Home Value Determined?
An assessor determines your property value. It’s a common misconception that they set property taxes, but that is just a myth. They only find out how much your home is currently worth.
How do they do this? They gather information such as previous sales from the area, zoning, topography, views, livable square footage, lot size, and other components. The value of your home is then determined by a computer analysis of the gathered information.
So why is your home valued differently from your neighbors? Well, although properties may look alike on the surface, there may be subtle differences. For example, you added a half bath to your house, while your neighbor did not. Something like that can drive up your home’s value, compared to theirs.
This is how the city determines what your house should sell for, but there are a few things you can do to help drive up your home’s perceived market value as well.
How to Add Value To Your Home
Now that you know how value is determined, how do you increase it? Firstly, we should warn you that not all home improvement projects will result in an increased home value, nor are all smart to proceed with. We mentioned renovations and additions earlier with the extra half bath, which is a perfect example of how to increase your home’s value. On the other hand, additions are also the most common way to price your home out of your neighborhood, so be sure to plan ahead!
If home additions and major renovations aren’t in the budget, you can do other things to increase the actual and perceived market value of your home. With that in mind, let’s get into it.
Stage Your Home
An attractive home sells. A house that potential buyers can see themselves living in sells even better. That’s achieved by staging it for tours and for professional photos.
Home staging is a way to make your house look lived in. It helps the buyers visualize the potential of each room and gives them an idea if their furniture will fit or not. Beyond the scale, it makes a house feel like a home. It’s much easier to connect with a kid’s bedroom or a nursery with a crib than it is an empty room.
It also helps increase your home’s value in the eyes of buyers. Recently, 22% of sellers’ agents said staging a home increased the dollar value offered by buyers by 1–5% compared to similar homes. And 17% said it increased value by 6–10%.
For example, if your home is worth $500,000, there’s a chance that following typical home-staging tips could help boost your home’s value by $5,000–50,000.
With that in mind, what rooms are the most important to stage? Here are the most common rooms homeowners recently staged, according to the National Association of REALTORS® (NAR):
- Living room (93%)
- Kitchen (84%)
- Master bedroom (78%)
- Dining room (72%)
Add Energy Efficiency
You might think adding energy efficiency isn’t the most exciting way to increase home value, but you’d be wrong. It not only increases a home value but brings it into the modern-day era as well. In fact, almost 70% of real estate professionals said that promoting energy efficiency in home listings was valuable.
NAR made it easy to find which energy-efficient tech was most sought after too:
- Heat and Cooling Costs (33%)
- Windows, Doors, and Siding Installations (29%)
- Energy-Efficient Lighting (23%)
- Energy-Efficient Appliances (21%)
- Landscaping for Energy Conservation (10%)
- Solar Panels Installed on Home (3%)
We hear you — some of these upgrades are expensive and may not be worth it for your home, your area, or your budget.. For example, replacing windows can cost upwards of $20,000, and getting a 70% return off the sale of your home may not seem like that much incentive, especially in the short term. Remember to only do what is right for you.
All of these features will not only drive up your home’s value in a buyer’s eyes, but it will increase your home value when it’s time for the assessor to make their rounds as well!
Add Curb Appeal
We all know the phrase “don’t judge a book by its cover,” but a potential buyer and an accessor will want to see perfection from the moment they pull up to a home. A home needs to be attractive on the inside and the outside. That’s where curb appeal comes in. If you’ve been neglecting your landscaping, or if it doesn’t really stand out from the crowd, then it may be affecting your home’s market value and how potential buyers see it.
Homes with high curb appeal tend to sell for an average of 7% more than similar houses with an uninviting exterior, according to a joint study by the University of Alabama and the University of Texas at Arlington.
Don’t just think about the front yard too. The backyard is equally important to spruce up and make inviting.
Think About the Future
If you’re thinking about building a home, you may be worried about the potential resale value of it in the future. While all of the tips we’ve shared so far will help boost your home’s market value, there is one thing you can do to make it stand out from the rest: hire an architect.
A study by The Modern House shows that a well-designed home can increase the sales price by 12%.
On top of that, hiring a professional will save you time and money. Think of all the little design choices that may not immediately come to mind, like a central closet for easy access to the vacuum, a laundry room that’s near bedrooms to avoid traffic jams, energy-efficient light bulbs, a convenient “drop zone” near the front door — little things like that! An architect will include those into your house plans to save you time in the future. You can’t put a price on convenience after all.
Additionally, an architect will know how to design a house that plans for the future. They won’t price you out of your neighborhood, nor will they make it impossible for you to potentially increase your home’s value in the future.
It all boils down to this: if you’re interested in having control over the future value (and resale value of your home), hire an architect.
No matter if you’re planning on selling your home in a month, a year, or a decade, it’s always best to plan for when that time comes. You will always want to capitalize on what you can boost your home’s perceived value, and in the future, you’ll want to be prepared so you know your home will sell for the right price. We hope these tips helped you!