Your home value is based on what willing buyers in the market will pay for your home, but every buyer is different. For example, one family might weigh location factors like schools and jobs over the size and condition of the home.
We’ve outlined some of the most important factors that influence your home’s value:
1. Neighborhood comps
One of the best indicators of your home’s value is the sale prices of similar homes in your neighborhood that have sold recently. These comparable homes are often referred to as “comps”. Whether it’s a home appraisal, a comparative market analysis done by an agent, or an Opendoor evaluation, most real estate experts will rely on comps to estimate your home value.
Advice for finding comps
Recency: Look for homes that were recently sold—the more recent, the better.
Feature Similarity: Choose homes that are most similar to yours in terms of features like type of home (two-story vs. ranch), year built, number of bedrooms, bathrooms, and square footage.
Distance: When possible, choose homes in the same subdivision as your home. This is because the house a block over may not be a good comparable if it belongs to a different subdivision with different HOA rules, school district, etc.
Location: If your home has a unique placement, such as on a busy street, golf course, or waterfront, look for comps that have the same placement.
The problem is that no two comps are the same so you’ll need to make adjustments for key differences. It can be very difficult to do this manually when comparing granular details like vaulted ceilings, proximity to a good school, or something abstract like a scenic view. To be precise you’d need to account for each different feature, and ideally you’d need to look at a lot of comps.
Luckily, computers are really good at this task. For example, we combine a robust data model that can analyze hundreds of pairs of comps for any given address with insights from local pricing experts. We’re then able to provide home sellers with a competitive, cash offer in 24 hours so they can simplify the process and move on their own timeline.
→ Curious about your home value? Start with a cash offer from Opendoor to price your home. The process is free.
2. Location
Your current home may be the ideal location for you — close to your job or near your parent’s house — but when appraisers determine how much value to assign based on the location of the house, they’re looking at three primary indicators, according to Inman:
The quality of local schools
Employment opportunities
Proximity to shopping, entertainment, and recreational centers
These factors can influence why some neighborhoods command steep prices, and others that are a few miles away don’t. In addition, a location’s proximity to highways, utility lines, and public transit can all impact a home’s overall value. When it comes to calculating a home’s value, location can be more important than even the size and condition of the house.
→ Learn more about how we calculate the value of your home.
When estimating your home’s market value, size is an important element to consider, since a bigger home can positively impact its valuation.
The value of a home is roughly estimated in price per square foot — the sales price divided by the square footage of the home. Say a 2,000 square foot house sold for $200,000. The price per square foot would be $100.
The price buyers will pay per square foot can vary greatly. Depending on where you’re buying, $100 per square foot may be a bargain or far more than it’s common to pay.
In addition to square footage, a home’s usable space matters when determining its value. Garages, attics, and unfinished basem*nts are generally not counted in usable square footage. So if you have a 2,000-square-foot home with a 600-square-foot garage, that’s only 1,400-square-feet of livable space.
Livable space is what is most important to buyers and appraisers. Bedrooms and bathrooms are most highly valued, so the more beds and baths your home offers, the more your home is generally worth. However these trends are very locally specific.
See our blog on renovations that can improve the value of your home. We rank the top projects and explore trends in our home improvement data.
4. Age and condition
Typically, homes that are newer appraise at a higher value. The fact that critical parts of the house, like plumbing, electrical, the roof, and appliances are newer and therefore less likely to break down, can generate savings for a buyer. For example, if a roof has a 20-year warranty, that’s money an owner will save over the next two decades, compared to an older home that may need a roof replaced in just a few years. According to HomeAdvisor, the average cost to replace or install a roof in 2019 is just under $8,000.
Many buyers will pay top-dollar for a move-in-ready home. This is why most buyers require an inspection contingency in their contract — they want to negotiate repairs to avoid any major expenses following the sale.
Our home maintenance and repair checklist can help you identify key areas of your home to inspect before selling. And if you want to sell your home and skip repairs altogether, learn how the process works with Opendoor.
5. Upgrades and updates
Updates and upgrades can add value to your home, especially in older homes that may have outdated features. However, not all home improvement projects are created equally.
The impact of a project or upgrade varies based on the market you’re in, and you’re existing home value. For example, based on data from our home improvement value calculator, a finished basem*nt in Portland is 5x more valuable than finishing a basem*nt in Atlanta, a roughly 13% increase on the median home value versus 2.5% respectively.
Additionally, some projects like adding a pool or wood floors tend to have bigger increases for more expensive homes, while projects like a kitchen remodel or adding a full bathroom tend to have a bigger increase for less expensive homes.
→ Try our home improvement calculator. See which projects can have the biggest increase on your home value.
6. The local market
Even if your home is in excellent condition, in the best location, with premium upgrades, the number of other properties for sale in your area and the number of buyers in the market can impact your home value. If there are a lot of buyers competing for fewer homes it’s a seller’s market. Conversely, a market with few buyers but many homes on the market is referred to as a buyer’s market.
If you’re buying in a buyer’s market, you’ll likely have more room to negotiate on the home’s price, timeline, and contingencies in the contract. Although if you’re selling in a buyer’s market, you may have to adjust the price to attract more offers or be willing to make concessions to a seller, like paying closing costs, covering repairs, or being more flexible with the timeline.
Additionally, market conditions can affect how long it takes your home to sell. In a seller’s market, homes tend to sell quickly, whereas in a buyer’s market it’s typical for homes to see longer days on market (DOM). DOM is a real estate statistic that indicates how long homes are actively listed before a contract is signed. If your home has been on the market for a longer period of time, buyers may perceive there is something wrong or that the price is too high. See our tips for selling your home fast.
7. Economic indicators
The broader economy often impacts a person’s ability to buy or sell a home, so in slower economic conditions, the housing market can struggle. For example, if employment or wage growth slows, then fewer people might be able to afford a home or there may also be less opportunity to relocate for new opportunities. It’s important to keep up with the current status of home sales and home price appreciation in your area, especially when as you evaluate the best time to sell your house.
We created a guide to understanding today’s housing market to help anyone who isn’t an expert or a psychic understand how current trends impact both buying and selling a home.
→ Planning on selling? Compare the costs of selling to Opendoor to the traditional process.
8. Interest rates
Why care about interest rates? Both short-term interest rates (like what you pay on a credit card) and long-term interest rates (like what you pay on a mortgage) influence your ability to afford a home, but in different ways. A rise in short-term interest rates may increase the interest on your savings, but it also makes short-term debt more expensive. For example, if you’re spending more money paying off a credit card or short-term loan, then you will likely have less money available in your budget to afford a home.
Short-term interest rates don’t directly impact long term interest rates. So an increase in the Federal Funds rate, doesn’t mean a 30-year, fixed-rate mortgage will become more expensive. Long-term rates are influenced by Department of the Treasury yields, investor sentiment, and inflation rates, among many other factors. You can learn more in our blog on interest rates and home ownership.
The point is as interest rates increase, fewer people may be able to afford homes, and this can impact how much you can sell your home for. We cover current interest rate trends in our guide to understanding the housing market.
Final thought
It’s easier to avoid common home-selling mistakes when you’re aware of the factors that influence your home value. Consider these factors in mind when pricing your home to help attract serious buyers and to prevent long days on market, which ultimately, come at a cost.
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Further reading
Home Selling Tips
52 essential real estate terms you should know
October 17, 2019
Home Selling Tips
The house closing process – what sellers need to know
March 12, 2019
Home Selling Tips
Top improvements that increase home value based on market data
Does Opendoor negotiate with buyers? Yes, Opendoor negotiates with buyers. It may concede less than regular sellers due to its business model. Working with a local real estate agent can help.
The customer takes videos and photos of their home and uploads them to their seller dashboard.Our pricing experts then use that information to finalize an Opendoor offer. Regardless of whether you walkthrough with a representative or self-guide, the pricing expert review process is the same.
You can check on the agent portal opendoor.com/make-offer and input the address of your buyer's interested home to see if there are any current offers.
Opendoor can sometimes price homes below market, which some sellers may not realize if they are unfamiliar with the housing market. They may also not know how to negotiate repair costs and spend far more than they would if they had listed their home with a traditional Real Estate Agent.
There's also no obligation–you can cancel your contract at any time before closing at no cost. Learn more about our pricing and how selling to Opendoor works.
Its preliminary offer is an estimate based on home size, age, and features, while its final offer is based on more detailed information about the home's condition and includes repair deductions and seller closing costs.
Start with a figure that's no more than 10-20% above their initial offer. Remember, you're applying for entry level, and you shouldn't expect something on the higher range. Consider negotiating lower if 10-20% places you above the average.
Most final walk-throughs happen a few days before, or even the day of, closing. The walk-through usually takes place after the seller has moved out of the home. If the seller hasn't fully moved out yet, they might be present for the walk-through. In this case, the seller's real estate agent would likely attend as well.
A final walk-through might take anywhere from 15 minutes for a small home to more than an hour for a larger property. Build in extra time to inspect extra items, such as a pool or a detached shed or garage.
The average time it takes for candidates to hear back about a job offer is between 20 and 40 days after an interview, according to Glassdoor. Yet, top talent is usually gone within ten days. The actual length will vary depending on your industry, location and local regulations.
The average time to get a job offer after an interview is 10 to 14 days. However, this can extend to over a month or even six to eight weeks, depending on the position. Why does it take so long to get a job offer?
Even when conditions were favorable throughout 2020-2021, Opendoor failed to book a profit. With mortgage rates rising at record speed in 2022, home sales volumes slowing, and home prices declining, many ask if the company is planning a turnaround too late in the real estate cycle.
If you change your mind or disagree with our repair request, you can cancel your contract without penalty anytime prior to close. Learn more about our repair process and common repair items we find. We'll walk you through the steps of the closing process. You choose your closing date—the timeline is up to you.
The sale can close on your timeline, anywhere between 14–60 days after you accept the offer. You have no control over the cost of repairs. Guaranteed all-cash offers mean there's no risk of the deal unexpectedly falling through. There's very little room to negotiate.
The FTC alleged Opendoor pitched potential sellers using misleading and deceptive information, and in reality, most people who sold to Opendoor made thousands of dollars less than they would have by selling their homes using the traditional process. The Commission vote approving final consent order was 4-0.
To have the photos of your home removed from our website and app, reach out to Opendoor Support at 1-888-352-7075. Please provide your support agent with the property address and closing date so they can promptly work to remove your property's photos.
In other cases, an offer might have been accepted in the last day or two, and the seller agrees to cancel the open house as a gesture of goodwill to their buyers.
The three most basic rules for negotiations are: 1) Prepare, 2) Listen 3) Be Present. This sounds obvious, but how often do we not follow those three basic rules?
If a negotiation is not progressing and seems to be at an impasse, it may be time to walk away. This is especially true if one party is being unreasonable or demanding more than what is fair. Additionally, if either party feels uncomfortable or threatened, it may be best to end the negotiation.
Opendoor's preliminary offer is usually 2-5% higher than the company's final offer, so it's good to think of your preliminary offer as an estimate. That's because the "instant" cash offer is an estimate based on information you provide Opendoor about your home's size, age, and features.
Real estate agents often suggest that sellers either accept the first offer or at least give it serious consideration. Real estate agents around the world generally go by the same mantra when discussing the first offer that a seller receives on their home: “The first offer is always your best offer.”
A right of first offer (ROFO) is a contractual obligation that allows the holder to purchase an asset before the owner tries to sell it to someone else. If the right holder is no longer interested in the property, the seller can then sell it to a third party.
A good range for a counter is between 10% and 20% above their initial offer. On the low end, 10% is enough to make a counter worthwhile, but not enough to cause anyone any heartburn.
The job offer tends only to be rescinded if the candidate is “negotiating for the sake of negotiating” or the number they are proposing is unreasonable. To avoid this outcome, remain polite and respectful. And as mentioned above, do your research to ensure the salary you ask for is fair.
You can increase your asking price by enough to still get as high as your list price after paying the buyer's closing costs. If your list price is $200,000, and the buyer offers $190,000 with $6,000 toward closing, you would counter with something between $196,000 and $206,000, with $6,000 for closing costs.
Ideally, the house should be empty during the final walk-through. If the sellers haven't taken out their belongings, it will be more difficult to thoroughly inspect the home, and you may miss any damage hidden by their furniture.
For homebuyers, it's important to use the final walk-through as an opportunity to test all the appliances included in the sale, confirming they work as intended. If something doesn't work, you can ask the seller for a repair allowance.
In most cases, this right to inspect the home is written into the home's purchase agreement. Violating the purchase agreement could allow the buyer to withdraw and/or sue for damages - so it is very rare that a seller would refuse the walk-through, knowing that it opens them to liability.
Once everything looks good, the buyer and seller sign a Verification of Property form to prove that the buyer had an opportunity to do a final walk-through of the property and was satisfied with its condition. The buyer then makes the final payments to escrow to cover the down payment, closing costs, and other fees.
During the walkthrough, a buyer and their real estate agent will go through the property. They'll check that there's no new damage, that all the home's systems and appliances included in the sale are still working and that the home is in a clean condition.
A blue tape walkthrough is a vital step in the home construction process that lets the buyer, builder and other important personnel check the new home. Then, together, you work to identify any improvements you want or need before the big move-in day arrives.
Definition: Walkthrough in software testing is used to review documents with peers, managers, and fellow team members who are guided by the author of the document to gather feedback and reach a consensus. A walkthrough can be pre-planned or organised based on the needs.
Generally, after making an offer on a home, the seller's agent will respond to you within one to three days. If it does take longer than that timeframe, don't stress about it too much, there are plenty of factors that may lead a seller to be slow to respond to your offer.
After getting a job offer, you can immediately accept, immediately deny or you can negotiate. “What I recommend doing is asking the hiring manager or whoever you get your offer from for a day or two so that you can review the offer.”
Why Do Job Offers Take so Long? Job offers take so long because hiring decisions are crucial for a company and the wrong decision is costly. The interview and hiring process involves multiple people and departments which creates more likelihood of delays, complications, and a long duration.
In certain states, an offer is considered revoked, and you are no longer legally bound to it after a certain number of days. For example, in California, the contract is considered null and void at 5:00 p.m. on the third day after the buyer signs it if the seller hasn't responded.
A reasonable amount of time to respond to a counter offer is within 24-48 hours. This allows the employer to make a well-informed decision and also shows respect for the candidate's time. It might take a few days in certain situations, like when a budget needs to be approved.
Its preliminary offer is an estimate based on home size, age, and features, while its final offer is based on more detailed information about the home's condition and includes repair deductions and seller closing costs.
Price cuts hit Opendoor hard, as the company makes money only if it can sell its real estate inventory at a higher price than what it bought it at. Last quarter, Opendoor's gross profit was a shocking negative-$425 million because of declining sales prices, even though revenue was up 48% year over year to $3.4 billion.
Opendoor sends mail to homeowners across the U.S. with information on selling and buying homes. If you'd no longer like to receive mail from Opendoor, you can opt-out here. Please allow 6 to 8 weeks after unsubscribing to stop receiving mail.
In the last quarter alone, Opendoor lost $399 million after selling more than 7,500 homes during the period. For all of 2022, the company posted a net loss of $1.4 billion — more than double the $662 million that the company lost in 2021, when it was cheap to borrow money and home prices were climbing.
“If the seller reaches their breaking point, they might ask a buyer for their best and final offer. That gives the buyer one last chance to put forward [an acceptable] offer before the seller turns their attention elsewhere.” A best and final offer might also be requested if a home needs to be sold very quickly.
It was revealed in September that Opendoor was selling homes at a loss, due to rising mortgage rates and uncertainty around the economy. Opendoor has stuck to iBuying — using technology to buy and sell homes — over the last two years, while others have exited the market altogether.
The unexpected steep decline in revenue forced Opendoor to focus on capital management to avoid a liquidity crisis. It cut operating expenses and focused on reducing inventory. Much of this has been executed successfully, but the company was still forced to sell much of its inventory at a loss as prices dropped.
Zillow and Opendoor were once competitors in the iBuying space. Now they're teaming up. The companies said Thursday they've formed a multi-year partnership to essentially feed Zillow users to Opendoor's iBuying platform by allowing sellers on Zillow to request an offer from Opendoor to purchase their home.
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