How Do I Determine The Value Of A Home In South Minneapolis?
How do I determine value in a home? Basically, I look at a ton of properties. That is the only way, I think, that you can truly determine the value of a home. I try to tour at least 10 homes per day in south Minneapolis so I am always on top of the market. Here is a list of what I do to determine the value of the property:
1. Analyze the location. Real estate is all about location, so I am looking to see if the house is on a busy street, close to a bus stop, if there is airplane noise and if the other houses on the block are in good or bad condition. I am looking to see if it is close to parks, lakes, creeks, restaurants, commercial buildings, etc. The location will have a lot of value if there are things close by that people like, and it will not have a lot of value if there are things close by that people don't like. It is that simple.
2. I determine the condition of the exterior and the interior of the home. As soon as I pull up to the property I am making a mental note of any items that need to be repaired or replaced, as well as how much it is going to cost to complete those repairs or make those replacements. From my years of remodeling and being in construction and buying and flipping a lot of houses I have a pretty good general idea on how much it is going to cost to repair most items on a house.
When it comes to the exterior, I look at the condition of the sidewalk, the front steps, the foundation, the siding, gutters, roof, windows, doors, chimney, soffits, facia and the landscaping. Once I get into the home I do the same in-depth analysis. I check the condition of the hardwood floors, doors, trim, windows, ceilings, walls, tile, granite, appliances, etc. I add up the total cost of fixing the items that I think need to be addressed, and then I add that number to the list price of the home. If that number is more then I think the house is worth, I ask myself, "what is the most I can pay for this house after fixing all of the items and still not overpay?" As long as I am not paying more than fair market value, I am ok.
3. I analyze the lot. This may seem similar to location, but you can have a really nice lot in a horrible location, so let me explain. In south Minneapolis, under the $250,000 price range, I am looking to see how buildable the lot is. I do this because I know that over time a lot of these small houses are going to be torn down so the buyer can build a modern home that is more suitable to the way most people live nowadays. So I am looking to see how level the lot is, what the size is and what the elevation is. If it is too small to build on then it is worth less, if it is big or really flat or extra wide then it is worth more. In the end, I want a lot that is at least an average size.
So that is how I determine value. Most of it is common sense, it just takes practice. Each home will be judged based on its competition (the other properties that are for sale), and buyers will always choose the house they perceive as the best value compared to their other options. If I can get a good home, in a good location, on a good lot, then I really like my odds as long as the price is right. So tour a lot of properties to figure out value, or hire a good real estate agent to do it for you.