3 Factors That Can Reduce the Value of a Home

3 Factors That Can Reduce the Value of Your Home | New Home Gurus

Your House Isn’t Worth as Much as You Think If One of These Factors Is at Play

It’s no secret that sellers want to get the MOST money possible for any house they sell. 

But at the end of the day, the actual sale price can fall short of what a seller expects to get from their house.


For several reasons, but usually, at least one of the following is involved.

3 Reasons Houses Are Worth Less Than Expected

Whether you’re thinking about putting a house on the market or you’ve already listed your home, these factors can drag down the value of the house — and they could give buyers an upper hand to getting a better deal.

1. The comps are in better shape.

Comps or comparable homes are similar houses in the same area that have recently been bought/sold. Comps are used to evaluate housing prices, and they should generally align in terms of:

  • The square footage of the home and the size of the property
  • The date the home was built (i.e., the age of the house)
  • The general condition and features of the house
  • The location, including the neighborhood, any homeowner’s associations, and the proximity to certain community amenities (like schools or major highways)

When the comps are simply better than the house that’s going on the market, the house for sale may be worth less. That can happen when, for example, comps have:

  • More space or acreage 
  • More recent renovations
  • More extensive upgrades
  • Better layouts and floor plans
  • Other desirable features, like vaulted ceilings, floor-to-ceiling windows, pools, and/or electric vehicle chargers

That’s why it’s a smart idea to check out comps before you list a house AND as you’re trying to figure out the best listing price.

2. Home improvements have gone too far.

Sellers who want to get the maximum possible price for a house will typically invest in home improvements, making certain upgrades before listing the home. That can be a smart move — IF sellers make the right updates and don’t pour money into the wrong things.

So, what are the “wrong” updates to make before selling a house?

Those can be any improvements that:

  • Do NOT generate any or enough of a return on investment (ROI): You won’t necessarily get a dollar-for-dollar return on renovations, so make these investments prudently. For example, a $150,000 kitchen renovation may not yield much more value for a house than a $75,000 kitchen renovation when all is said and done.
  • Are the first in the neighborhood: You don’t necessarily want to be the house that’s the first one to some other major upgrade because it can be more challenging to recoup the costs of those investments. For instance, being the first on the block to solar panels may not work out as favorably as you expect. Still, if certain features or amenities are common in the area, adding that to a house can increase its value.

So, be strategic about the upgrades you make to a house before putting it on the market — and do NOT expect to get a dollar-for-dollar return on those investments.

3. Increasing interest rates have impacted the housing market.

Sometimes, home values aren’t dragged down by the condition or features of houses but, rather, by the housing market in general.

In fact, rising interest rates can make it more difficult for buyers to borrow funds and take out mortgage loans. When that happens:

  • Buyer demand for houses can drop: Fewer buyers will be able to afford homes when interest rates are high. That can bring about a buyer’s market.

  • Housing prices can fall: With fewer buyers and more houses available, it’s usually more challenging to command top dollar for a home, even when that house is in optimal condition.

Consequently, smart sellers will typically take the pulse of the housing market before listing a home, whenever possible.

Selling a Home in Texas? Work with 5-Star Realtors® & Get CASH BACK at Closing

No matter where or when you’re selling a home in Texas, you can get experienced help and cash back at closing when you work with the 5-star Realtors® at New Home Gurus.

We can guide you through the process, helping you with offers, negotiations, and closing. Plus, we’ll split our commission with you at closing!

Home sellers who work with New Home Gurus can get back an average of $4,500 to $12,000 at closing.

How Much Cash Can You Get after Closing?

Call (281) 668-8124 or Contact Us to Find Out Now

We are standing by, ready to answer your questions and explain the details of our commission-sharing program.

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