I often get asked while completing appraisal inspections, “Do you count X when you do appraisals?”. The short answer is that we try to consider everything that a typical buyer for that property would consider. Below are some of the top factors affecting home values from a Chicago real estate appraiser’s perspective.
Location or Neighborhood
In Chicago, the neighborhood you live in can have a drastic effect on your properties value. Your home’s proximity to public transportation (CTA or Metra stations) as well as restaurants, shopping, grocery stores, quality schools, parks, etc all affect value. Conversely, having a location with noise pollution can have an adverse effect on your home’s value (directly across from train tracks, on a busy street, next to a gas station, etc.)Es war einmal in Deutschland 2017 movie download
Gross Living Area (GLA)
GLA is defined as all liveable space that is 100% above grade (Gary Kristensen has a great article and video that goes into further depth). The amount of value per square foot is determined on a case by case basis depending on many factors.
Condition or Effective age
The effective age of the home is determined by the amount of updating or overall condition. For example a home built in 1955 could have a 10 year effective age if the home has recently had a significant amount of renovations completed. Keep in mind that just because you spend $25,000 on a new kitchen that does not necessarily increase your home’s value by exactly that amount.
Quality of Construction
This refers to the materials used to build the home and the overall quality of finishes on both the interior and exterior. For example, an all brick home compared to a home with aluminum siding or stucco, granite countertops compared to laminate countertops, hardwood flooring compared to carpeting, solid core 6-panel interior doors compared to hollow core flat panel doors, etc.
A larger lot can add significant value. This is especially true when looking at possible “tear downs” in Chicago because the size of the new construction home is typically limited by the zoning department to a percentage of the size of the lot. A 30’ x 125’ lot compared to a 25’ x 125’ lot can have a significantly higher value in areas where there is a demand for buildable lots like Lincoln Park, Old Town, Gold Coast, etc. As you get further out on the northwest side and there is not as much demand for new construction, a larger lot could mean room for a side driveway.
Bed and bath count
Generally speaking, more is better. However, in many neighborhoods there is no discernable difference in value between a 4 bedroom and 5 bedroom home. The law of diminishing returns typically will apply. For example, the difference in value between adding a full bath to a 1 bath home is typically greater than adding a 4th bath to a 3 bath home.
This can be best demonstrated by condos in Chicago high rise buildings. Two units that sold at the same time, with the same floor plan, located on the same floor, but with different exposures will likely have different values. The one that faces west and only has a city view vs. the other unit that faces east and has a view of Lake Michigan can have as much as a 10-15% difference in value.
These are things like fireplaces, decks, porches, patios, garages, landscaping, layout (open floor plan vs. closed/boxy layout), etc. Jeff Hamric discusses floor plans with functional obsolescence here.
While these are the top features that influence value, there are many other things real estate appraisers consider. If you have any questions on how any of these items may specifically affect your situation, please feel free to post a comment below or call me at (847) 863-5776.