Donna Littlefield, Associate Real Estate Broker in Western New York

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What Determines Property Value?

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Property ValuesWhat determines property value? That’s a good question that gets a couple different answers depending whom you ask.

For people who want to sell their home, the property value is what a ready-and-willing-and-able buyer is willing to pay for the house. It’s a number that’s typically calculated by looking at comparable homes in the neighborhood which sold recently.

Similarly, when a municipality is figuring out property values in order to assess taxes, their assessor may also check properties which are similar nearby in order to value residential, vacant and/or farm properties. For example, if a nearby ranch home with 3 bedrooms built in 1979 with a two-car garage and a fireplace is just like your house and it sold for $150,000 a month ago, then it’s likely your house is worth about the same. Assessors may also use the cost or income approach to figure out property value.

The cost approach to determining property value equals the cost to replace a structure with a similar one using today’s labor and material prices, minus depreciation and plus the market value of the land it’s on. This cost approach is typically used to find industrial, utility and special purpose property values.

The income approach includes an analysis of how much income a property will produce if rented, taking into account things like maintenance costs and operating expenses.

Meanwhile, assessors may use computer assisted “mass appraisal” techniques in order to estimate values.

One other major factor that plays a role in determining property value is supply and demand of land in an area. Certain neighborhoods are more desirable than others for a number of reasons, and since land is in limited supply, its price mostly increases over time. Therefore, a home bought in East Amherst in 1970 for $50,000 might be worth $500,000 today simply because that area has built-up and become a bustling place where people want to live. Land underneath a structure doesn’t depreciate (for tax purposes).

So property values are typically determined by the land where they’re at coupled with figuring out how much similar structures have been selling for in recent times.

Reasons to Stage Your Home Before Selling It

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Some people are active when they want to sell their home, while others are passive. The active ones end up getting a better deal in the end. One of the “active” things you can do when thinking of selling your home is to have it “staged.” This is where the house gets spruced up to look magazine-worthy. Cleaning out the clutter, bringing in some nice, new furniture (which can be rented, by the way), and perhaps painting some walls to freshen up the place can truly make it more inviting and alluring to potential buyers.

Ultimately, if you want to get the highest price for selling your home, staging is going to help you do just that. You want to make your place look and feel so good that buyers desire to have it. You want them to feel compelled to buy it because it’s so perfect.

Staging not only helps up the purchase price of a place, but also helps it sell better. Staged homes sell more quickly than non-staged homes, and that’s no surprise. If you’re in the market to buy a place, and you find two similarly priced ones but one’s prettier and nicer looking than the other, you’re going to go with the nicely staged one.

Meanwhile, staging can be good for sellers because it essentially forces them to finally clean up all their stuff and figure out what they want to do with it. For some people, this means putting stuff in boxes and storing it out of sight. For others, it means having a big garage sale and/or donating stuff that’s no longer useful or needed in their lives. As a bonus, staging helps teach people about decorating rooms to make them have a strong visual impact. It informs people of how to make rooms feel more open, too. This can come in handy when moving to a new place.

Finally, staging a place helps create a favorable first impression. Buyers, once they walk through the door, will sense right away whether they could see themselves living there easily… or not. Staging puts people’s minds at ease because things are arranged nicely and in a pleasant and open way. Non-staged homes, on the other hand, give buyers too many things to think about as they make a long mental list of things they’d have to change and/or do to make it look and feel the way they’d want it to.

 

 

 

How Much Can I Spend On a Home?

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In your mind you want to buy a home. Now what? For starters, you have to figure out how much you can spend on the place.

It has been said that you should spend no more than 28% of your monthly income on a mortgage. So, in a simple math example, if you were making $1,000 a month, $280 or less of that should go toward “paying off the mortgage.” Keep in mind, too, that there are associated costs with buying a home, such as closing costs and legal fees, which tend to add on an additional 3% to the purchase price. Like with most “big purchases,” you should always plan to have to pay “a little extra.”

When deciding to buy a house and figuring out how much to spend, there are a number of factors involved. Generally, it comes down to “the market” and “your bank account.” With the market, take a look around at neighborhoods you’d consider to be in the price range you’d like to pay. A home in East Amherst, for example, is probably going to cost more than a home in Depew. You’ll want to explore areas pertaining to their quality of schools, crime stats, amenities and more. When looking at a map, you can circle places you think you’d be comfortable living in that also happen to be places you think you could afford. Next, consider your bank account. How much money have you saved up for the big purchase? Do you have a steady income for the foreseeable future? Ideally, you want to find a house that makes sense for your current financial situation, in an area where you’d like to live.

For those of you who like to “do the math,” take your annual salary and multiply it by either 3 or 4 to give you an idea of the price(s) of homes you should consider. For example, if you make $50,000 a year, multiply that by 3 and you’d be looking to buy a house for $150,000. You can also think of the cost as “how much per month will I be paying for this?” In order to find that number, use your monthly after-tax income figure and subtract your current debt payments. Then, multiply that number by 25% to find out what you truly can afford to pay on a monthly basis for your new home.

If you need help determining the right Western New York houses for your budget, contact Donna Littlefield today.

Why do Some Homes Stay Longer on the Market than Others?

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Why do some homes stay on the market longer than others? Generally, price is the biggest factor. Owners who think their home is worth much more than what the market is willing to pay often find themselves listing their homes for months or even years to no avail. Even though the owner thinks the home they put so much time, energy and sweat equity into may be worth a million bucks, if the majority of homes nearby are all selling in a particular range, the owner would sell his or her home faster by dropping the asking price to a more reasonable amount.

There are, of course, other reasons homes may linger on the market. Besides price, there’s appearance. If there are two similar homes in a neighborhood, priced similarly, the one that’s better looking (or more “up-to-date”) is likely to sell faster. Curb appeal matters a lot, after all. People want to buy a nice looking place, preferably updated to today’s standards. And just like people dress up to look their best for a first date, a home’s front yard needs to look its best. Has the lawn been mowed or not? Is there paint peeling on the window shutters? Did a gutter become loose? Are there more weeds than flowers in the garden? These “little things” matter!

The interior of a home also matters. Some people, for whatever reason, refuse to make any stylistic upgrades to their homes. When potential buyers walk in to see stained old rugs, cabinetry from the 1970s, and appliances that haven’t been changed since the Nixon administration, they’re not going to be too eager to buy the place. Also, if a place appears cluttered, that can deter buyers as well.

Finally, things like an older roof can contribute to a home not selling quickly… people worry they’ll have to replace an old roof, which can tack on $10,000 or more– an expense they may not want.

If you’re having issues selling your home in Western New York, contact Donna Littlefield for help today.

Things to Consider When Searching for a New Home

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Just like in business, where location is “everything,” the same can be said for house hunting. Indeed, that’s the number one thing to consider when searching for a new home. Location determines so much– from commute times to how big (or small) your yard will be. It’s important to research locations and do a pros/cons list of each one, ultimately deciding a “top 3” list of potential locations where you could see yourself living comfortably.

With regards to location, there are several factors. For most people, it’s “how close to work is it?” If you have a job in Rochester, but live in Buffalo, that one and a half hour commute might not be ideal, especially in winter. But if you have a job in Tonawanda and a house in Wheatfield, that fifteen minutes or less commute works well.

Many couples who want to get married have to decide where they’ll live. What happens when she’s used to living in the rural country and he’s a suburban guy at heart? Perhaps they compromise and choose to live in an area that straddles the border between rural and suburban.

How much does public transportation matter to you? Do you have a need to be close to things like Tim Horton’s, Wal-Mart, and/or a certain mall? What about a church you attend or a school system you’d like your kids to be enrolled in? Location matters– a lot! Spend time in the neighborhood(s) you’re thinking of moving to, both during the day and at night, to get a proper “real feel” for what life is like there. Does a siren from a firehouse go off too many times nearby? Are there noisy train tracks in the vicinity? What about industrial smokestacks around the area? Of course you’ll also want to consider how safe a place feels: can you walk outdoors, alone at night and feel good about sending your children outdoors to play?

Searching for a new home also involves your personal situation and what your future holds. For instance, one woman who is single and in her early sixties currently lives in a two-story home may love her property, but she may be worried that as she gets older she won’t be able to easily climb up and down stairs, and may prefer a ranch home elsewhere.

Other things to take into consideration about a potential new place to live include aesthetics: does the new place look nice? Could you see yourself living there? Does the feel of the house fit your personality and lifestyle? Is there enough room for your stuff? How’s the landscaping?

Finally, people tend to focus on bedrooms, bathrooms and kitchens, since those are places in a home where they spend the most time. Therefore, pick the home which offers the best versions of those rooms to meet your specific needs.

If you need help finding the right home for your needs in Western New York, contact Donna Littlefield today.

Things First Time Homebuyers Should Know

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Buying your first house is a big deal. It’s also not something you do everyday. Before you take the plunge and buy your first house, there are plenty of things to consider.

First, it’s all about the money, isn’t it? It comes down to this: how much can you afford? Think about how much money you have saved up over the years. Then talk with mortgage brokers to see what options are available to help finance your purchase. Factor in other costs, such as yearly taxes. Some homes can have taxes that are cheap– say, $600 a year– while others, especially if they’re near water like the Niagara River, can have taxes over $10,000 a year. Do some calculations and come up with the best price range for your situation. Most first time homebuyers around Western New York tend to pick homes in the $70,000 to $159,000 range.

When meeting with a mortgage broker to discuss buying a house, they’re going to want to know your credit score. The higher the score the less risk you pose to them. In other words, they don’t mind lending money to people with high credit scores because it’s easily assumed they’ll get paid back on-time and in-full. So, if you have a “low” credit score, it’s time to stop buying things you don’t need using your credit card. Pay down your debt. That can help improve your credit score, and you’ll want to aim for this months in advance before talking with a mortgage broker.

Since buying a house involves a big amount of time, money and sweat, it’s best to consult with a realtor. He or she knows more about the process of buying a house than you do. Their expertise, especially at negotiation, can prove invaluable when buying a home. It’s better to have a realtor as your trusted advocate than to go it alone.

Also, consider having the home inspected before you buy it. This way you know, for sure, if there are any problems with it that could/should be fixed before you take ownership. You’re better safe than sorry– an inspection report gives you a detailed idea of exactly what you’re getting into!

Take time to familiarize yourself with real estate terminology so you’re not ignorant. For instance, look up the terms “down payment,” “closing costs,” and “real estate comps” using Google.com so you’re informed about the process. Real estate, like sports, has its own language/jargon.

For help buying your first home in Western New York, don’t hesitate to connect with real estate broker Donna Littlefield. Her number is 716-578-1788 and she specializes in Wheatfield, Pendleton, and Amherst, which are all desirable northern suburbs of Buffalo, New York.