7 Factors Influencing the Value of Your NJ Real Estate Home

What you need to know to increase the value of your NJ real estate

 

The NJ real estate market of today presents many challenges to home buyers and sellers alike. Along with rising interest rates and strict credit guidelines, homeowners should expect some changes regarding the way in which the value of their home is determined as well. While these changes should not be detrimental, NJ real estate homeowners considering refinancing should be prepared for a thorough investigation from their lender before any credit is granted. Because NJ real estate home values have been steadily decreasing for the past few years, lenders are doing their best to determine not only the current value of homes, but also what they will be worth several months or several years from now.

Below you will find the 7 factors influencing the true value of your home:

Past Sales Comparisons

In an effort to determine the most accurate value of what your NJ real estate home is worth, Realtors will compile a report on the number of sales transactions completed in your area last year, six months ago, and currently. This is done to try to forecast what direction values are heading in your area.

Current Asking Prices

The asking prices of comparable NJ real estate homes for sale in your area are a general requirement of lenders, and being paid much closer attention to in the current market situation. These statistics give lenders an idea of what price your home could initially be listed for, if up for sale. Keep in mind that the asking price and the price a home eventually sells for may vary by several thousands of dollars.

Appraisal

An appraisal done by a certified professional is also considered and required by your lender. However, appraisers these days have stricter guidelines to abide by and will likely spend longer in your NJ real estate than in years past. Their reputation is at stake, and they want to ensure make that their appraisal is as precise as possible.

Days on the Market

In addition to past sales and current asking prices, lenders will also look to see how long comparable NJ real estate in your area remains on the market before the sale closes. The longer the homes in your area stay on the market, the more likely the lender will be to consider your area a declining market.

Price Reductions

Lenders and NJ real estate agents also look at how many homes in your area have had price reductions. They will study these reductions not only on the comps in your area but on all properties in your area. If most or all of the homes in your area have been reduced in price, your home may be deemed declining in value, therefore reducing the amount of money lent to you.

Homes in Default

This factor will play a bigger role now than in recent years. Lenders and realtors will indefinitely be looking at the number of homes in your area which have received a notice of default, a document stating they are delinquent on their mortgage payments. This document is known as the first step in the foreclosure process, and a substantial number of them can negatively impact the value of your home.

Homes in Foreclosure

Perhaps the biggest indicator that your home is situated in a declining market will be the number of homes that are in foreclosure in your particular area. Although this is not your fault as a homeowner, your home may be valued lower due to increasing numbers of foreclosures in your neighborhood.

 

The NJ real estate market is changing rapidly and expanding into new avenues almost daily. Sometimes it can be very difficult to find the answers you need on a specific topic or issue. In times like these, you need a real estate professional who will provide valuable information and trustworthy advice. For more information about NJ real estate, call us today or click here to be connected with one of our top real estate specialists.