Linda Heubach, REALTOR®, E-Pro
952.931.9008
Partner in Counselor Realty's Wayzata Office
Top 5% in Sales in Minnesota Last Year, All Agents
E-pro Certification National Association of Realtors (NAR)
Member CRS - Council of Cert Residential Specialists
Self Employed 30+ Years in Housing & Service Industries
Linda is the high touch people specialist & Leader of our team
Chuck Heubach CRS CRB GRI
952.239.1311
CRS Council Certified Residential Specialists (NAR)
CRB Certified Real Estate Broker (NAR) 1 of 37 in Minnesota
GRI Graduate Realtor Institute (NAR)
Real Estate Instructor
Appraisal Experience
Mortgage Industry Experience
Call Us To Customize an Opinion of Value for YOUR Home
Why Didn't My House Sell?
What is the differnce in selling prices for external causes? Read our CASE STUDY here.
Thoughtful commentary on what is "typical" and why your home needs to be better.
10. Market Conditon Theory
Market condition theory is based on actual depreciation. A brand new home is, in theory, worth 100% of it's structure value plus land and improvement value, while a 100 year old home with no improvements is theoretically ready to fall into dust. It is worth 0% of it's orginal value land value. Put another way, a home will lose 1% of it's value every year until it is totally used up. This is "actual age". Actual age is altered by maintenance and repair, which is called "effective age".
EFFECTIVE AGE EXPLAINED.
If a home is forty years old, it is worth 60% of it's original structure value plus land value and such values as driveways, walks, etc. But two homes sitting side by side, one with a new kitchen and new siding will be worth more than the other. This is because the owners of the improved home have, by their updates, repairs, and maintenance, made the home so it will take it longer to fall into dust. Perhaps we could mentally sit on the sidewalk and say; "That home's condition is more like a 20 year old home than a forty year old home." If we could, then the effective age of the home would be 20 years and it would be worth 80% of the money it would cost to rebuild it this year.
What increases effective age?
In a word, condition to the structure itself...not to the components that wear out like appliances and roofs. Tasteful and moderate decorating helps, but that is subjective. Not everyone likes red walls...others love it. Things like roofs, furnaces, and hot water heaters have their own depreciation periods. For example, roofs are commonly considered to have 20 year lives. At 10 years, the roof is worth half of the replacement cost. Since the "average" home on the market have roofs that are 10 year old, that value is already built into the price of a home. Therefore, a BRAND NEW ROOF is only worth half of it's replacement value the day it goes on. In other words, we don't add the full value of a new roof, becuase to do so would assume that the average home on the market needs a roof...simply not true.
To Learn More about Market Condition Theory and Valuation, contact us. We will be pleased to discuss your exact valuation problem.
THIS SITE IS BEST NAVIGATED BY USING THE BUTTONS ABOVE AND STEPPING THROUGH THE PAGES