There are many cases in which you are going to be offered bad real estate advice. This even happens when referring to real estate property valuation. There are realtors that do understand how to properly value real estate but many agents and investors are going to make some mistakes. Yigang Tang showcases those mistakes that are more common than they should be.
Property Value Added For Bedroom
This is one of the most common valuation errors you will see. Bedrooms are going to add value in many cases but in most this does not actually happen. When there is a house that has more bedrooms, the home is larger and more valuable. However, it is not the bedroom that actually ads value. Value comes from square footage.
When there are two houses that are the exact same size and one has an extra bedroom, it can lack something else or rooms might be smaller. This can actually deter buyers. The exception to this is when you have a house that does not actually conform to the neighborhood. As an example, if most homes in the neighborhood are 2 bedrooms and yours is 1 bedroom, adding an extra bedroom is going to add a lot of extra value.
Not Correctly Adjusting Square Footage
This is a much less common error but one that can be quite devastating. It is sometimes noticed that home value is determined based on price per square foot models. So many real estate agents actually make the mistake. This is an error that will use average prices and then multiply the number based on house size as homeowners try to add value.
Adjusting for size is definitely something that you need to think about since larger homes will normally carry increased value but adjustments can easily be messed up. Remember that value per single square foot will decrease as the home gets larger.
Comparing Non Similar Style Properties Without Adjustments
One of the really common valuation problems in this case is to compare rambler style homes to homes with stairs. The house that has no stairs is actually more valuable. At the same time, when you compare newer homes with older homes it is easy to make valuation mistakes. Used homes are never going to have the exact same value as brand new real estate properties. Newer homes are simply going to be worth more. Never compare properties, especially when referring to age differences and think values are the same simply because sizes and styles are the same.
On the whole, do not blindly trust valuation that is offered since you can easily end up faced with mistakes done even by true professionals. It is really important that you get valuations done by those that are actually experienced and that do know all that is possible about how to get values right. In many cases it is actually a good idea to get valuation done by more professionals so that you can see what they all say. Choose the services of those that have a perfect reputation.