Price is key in selling the property, but what every real estate agent must keep in mind is how the price is determined. Property owners can set the price at their own will, but that does not mean that it will be sold for that amount and that it is its real value. The basic factors according to which the value of real estate is assessed are: location, square footage, age of the property, degree of arrangement and the current market situation.
Location, location, location
Location is the first and most important factor that affects the price of a property. A good location does not necessarily mean that the property should be located in the center, but that in the immediate vicinity of the property are all the necessary facilities, ie the infrastructure (school, hospital, post office, bank, shops, good connections, etc.) that provides quality of life. This is also called a macro location.
After that, we have a micro location that refers to the position of the property within a particular neighbourhood. The micro location tells us how far the property is from the school, kindergarten, whether it is close to the road, how far it is from public transport, etc. These differences can be very significant, which ultimately greatly affects the price. Good positioning of the property in the neighbourhood is extremely important.
The third location refers to the location of the property in the building, which would mean that in the case of a residential building it is very important on which floor the property for sale is located; the price of an apartment in the basement of a building is significantly lower than the price of an apartment on the second floor of the same building.
Square footage
Square footage is essential in order to calculate the value of property itself. The area needs to be multiplied with a certain price per square meter. But not every surface is fully usable and functional. Customers mostly look at the layout and functionality of the area. Furthermore, the area of the property includes additional facilities such as a loggia, terrace, storage, garage or parking space, but the area of the terrace cannot be calculated as the square of the room.
We can say that buyers do not buy the area but the rooms inside the apartment that they need for living, which means that if they have everything they need to live in a 60m2 apartment, they will rarely opt for an 80m2 apartment due to the price difference. On the other hand, there is a higher demand for smaller apartments, although their price per square meter is generally higher than for larger apartments.
Age of the property
Old construction should be lower in price than new construction, as old construction often requires additional investments. The conclusion is that the best-selling properties are a few years old. Such properties do not require additional investment, and yet they are not new construction, so the expected price is slightly lower.
Degree of real estate arrangement
The arrangement of the real estate refers to the interior, whether the real estate is sold furnished or unfurnished, and with what degree of equipment and preservation. Sellers often know how to overestimate their belongings and furniture, especially if they leave paintings and art that customers aren’t exactly willing to pay for.
Current market situation
This factor refers to the demand for a particular property, ie how many similar properties have been sold at that location recently and at what price. So we get an approximate figure of the price per square meter and then that price is adjusted according to the virtues and / or flaws of a particular property. The market price of real estate is often influenced by external factors such as the current state of the economy in the country, lending conditions of banks and interest rates, the geopolitical picture of the country and similar.
Price is key in selling the property, but what every real estate agent must keep in mind is how the price is determined. Property owners can set the price at their own will, but that does not mean that it will be sold for that amount and that it is its real value. The basic factors according to which the value of real estate is assessed are: location, square footage, age of the property, degree of arrangement and the current market situation.
