5 Important Factors That Influence A Home’s Value

Buying A Home

5 Important Factors That Influence A Home’s Value

May 14, 2021

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Buying a home is a lot like solving a puzzle. You have to fit a number of different pieces together precisely to win the game, or should we say buy your dream home. 

If you are planning to buy a home, knowing all of the factors that influence a home’s value is essential. Those factors will help determine whether or not the house that you are looking to buy is actually worth the asking price. After understanding these factors, you will be able to assess house prices more efficiently, and negotiate more effectively, which will eventually benefit your search for a dream home. 

In this blog post, let’s take a look at the top 5 factors that influence the value of a home so that you can make a well-informed decision: 

  1. Future Infrastructure Developments

Infrastructure development is a crucial factor in property appreciation. New developments such as transport, a shopping complex or a transit hub, generally increase the chances of more people moving to the neighborhood. Hence, the demand for property in the region is likely to increase, which eventually leads to house prices going up.

Always assess the scope of future developments in the region when looking for a home. Although a seasoned real estate professional can be your best friend in capturing all this information, it is always a good idea to reach out to the development authorities to get authentic information. 

  1. Neighborhood 

There are 3 observations to make about a neighborhood to find out how it influences a home’s value. 

 Employment opportunities

  Proximity to recreational centers, local market and shopping complexes 

   Schools in the area

A home located in a neighborhood that has all of these amenities is going to be a little more expensive than if they were located far away from them. However, buying a home that has limited access to any of these amenities can be a bad idea since they are going to impact your day-to-day activities. 

  1. Usable Space And The Overall Home Size

The overall size of the property and the usable space in the home are the two critical factors that primarily influence the price of a home. Generally, homes that have more bedrooms and bathrooms have a slightly higher value compared to ones that have a lesser amount. 

Don’t forget to keep the space factor in mind when assessing and evaluating a home. Then, decide whether the asking price is worth what you are getting.

  1. Age And Condition Of The Home

An older home might come with a lower price tag, but in the longer run it can prove to be a bad investment. The cost of repairs may go well beyond the price you paid for the home and the need for them may show up sooner rather than later. From roofs and plumbing to flooring and electrical fittings – you might be risking it all. A new home, on the other hand, will come with an assurance that you will not have to incur these expenses in the near future. 

A thorough home inspection can help you easily judge the condition of an older home, and determine whether there is any foreseeable damage but, it is still advisable to choose a newly built home over an older one. 

  1. Local Property Market

Buying a home in a buyers’ market gives you more room for negotiation, whereas you don’t get this luxury in a seller’s market. 

For those of you who don’t understand the two terms, here’s what they mean –

A market where there are a few homes but a large number of buyers is a seller’s market. On the other hand, if there are more homes and a few buyers, then it is called a buyers’ market. 

Understanding the local property market before buying a home gives you the knowledge and sometimes the leverage to get the best home at the best price.

 That’s Not All

Although these are the 5 most important factors that play a role in the determination of a home’s value, there are other factors that have a role as well.

 Interest rates: lower interest rates mean more people can afford to buy home, giving rise to a buyers’ market, and directly influencing the price.

  Economic growth indicators: higher inflation and slow economic growth means that people have lower income, and cannot afford to buy a home, giving rise to sellers’ market and influencing house prices. 


You don’t want to make the mistake of buying an overpriced home. The information mentioned above is surely going to be of value when determining whether the home you are dreaming to buy is worth it or not. 

You might think that hiring an experienced real estate agent can solve this problem, however, even their advice will be only valuable if you have some knowledge of the property and real estate market. 

Hoping that this post will be of good help to you, we wish you all the best in your search. 

If you are finding it hard to get the right help when buying a home, we recommend you to get in touch with a Negotiator Recognized Partner or an NRP. An NRP can negotiate relentlessly on your behalf to ensure that you get the best property at the best price. So, what are you waiting for? Get in touch with an NRP today!