Now, that we have established the importance of the CMA area, I would like to move the home evaluation about the home and its features.
Lot Size and Dimensions
We start with the lot size and lot dimensions. In the Mar Vista/90066 area, the lot size is of paramount importance, because of the anti-McMansion ordinances that have been passed by the city of LA. A 6000 square foot lot is more valuable than a 5000 square foot lot, which is obvious. What is difficult to evaluate is how much more is the larger lot worth than the smaller lot. This is where my Engineering background has come in useful. What I have done is created a gradient system to take into account the difference between the 2 lots. So imagine cutting the 5,000 square foot lot into 5 pieces all with the same size, so each piece was a 1,000 square feet. now assign a gradient figure to each of the pieces. The front piece would be more valuable than the second piece, the second more valuable than the third and so on. To figure out the difference between the 6000 vs. 5000 lot, we would imagine the 6000 lot with a 6th piece of 1000 square foot. That 6th piece would have the equivalent value of the firth piece of the 5000 square foot lot. Sound confusing does it not? However that is what I have done to come up with a more consistent and accurate way of determining the land or lot size difference between 2 properties.
The next priority in determining value is the square footage of the home or building. I hope it is obvious that a 2600 square home is worth more than an 1800 square foot home. The more ardent task is to come up with a price per square foot difference that will equalize the values. Whenever we can, we pick the comparable homes “comps” as close in square footage with house we are evaluating, because the closer the square footage of the homes, the more accurate the comparison. For example, what would be the difference in the value of a 1600 square foot home and an 1800 square foot home. If we were to use $250 per square foot, the large home would sell for $50,000 more than the smaller home.
Impact of Age of Home
A decade ago, the age of the home was not as significant as it is today. A few reasons, the first being that the Department of Building and Safety, are making more changes to the building codes which is increasing the cost to build. For example, 2 areas where this is noticeable is the “green” requirements and earthquake safety. An earthquake bolting today is huge compared to what was used 10 years ago. The current fashion in material also plays a part as Corona was the top of the line a few years back has fallen out of favor. I have noted that a house with 3000 sq ft built today vs. 10 years ago will sell for $500,000. So year built is taking on more importance.
As we go inside the home, the priority is how many bedrooms and bathrooms. A definition of bathrooms is in order. A full bath is one with a sink, toilet and tub; a three-quarter bath is one with a sink, toilet and shower, a half bath is one with sink and toilet and a quarter bath is either a sink or toilet. The number of bedrooms and bath is significant as most buyers make decisions as to whether they see a home or not depending on the number of bedrooms and baths.
Next comes up with the issues of kitchen and bathrooms remodeling, so it easy to understand that a kitchen that has been remodeled will sell for more than one that has not. What is not easy is to determine what the value of the remodeling maybe for comparison purposes. Also what if the house has been upgraded by refinishing the existing hardwood floors or newly installed hardwood floors. Even window treatments come into play since plantation shutters are more expensive than simple miniblinds.
Landscaping has value in determining the value. A well designed and manicured front and rear lawn will of course sell for more than one that has been neglected or is full of crab grass. Again, the distinction that one will sell for more than the other is easy; the more difficult task is what the dollar difference is.