The Richards' farm is located on a 10-acre parcel of land, which is very rare to come by in their area. However, the house is rundown and in need of many repairs. Buyers in the area looking for a move-in ready home would need to either look elsewhere or wait several months for the home to be renovated. Which factors are negatively impacting the value of the Richards' property?

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19 September, 06:05

The Richards' farm is located on a 10-acre parcel of land, which is very rare to come by in their area. However, the house is rundown and in need of many repairs. Buyers in the area looking for a move-in ready home would need to either look elsewhere or wait several months for the home to be renovated. Which factors are negatively impacting the value of the Richards' property?

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Answers (2)

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Kobe Khan · Answer 1

Answer: Demand and utility

Explanation:

Richard's property has a lot of items that needs fixing and buyers who come around want to purchase houses that are already made, this would affect the demand for Richard's property, the demand would be very low, so low that the pricing for the property would not come close to what Richard placed for it. The buyers are looking at what they can gain in the property (utility) before investing money, they are avoiding buying the property and still spending more money to put it in shape and make it favourable for themselves. Richard has a lot to do in his property if he wants a high demand for it.

Javon Vaughn · Answer 2

Several factors affect the price of real estate, some affect them positively, others negatively:

the most important ⇒ location, in this case location is a great factor that increases the value of the property. supply and demand ⇒ supply of similar properties is very very low, but the demand is also uncertain due to the poor condition of the property. Most home buyers are looking for more modern houses or at least in better conditions. size and facilities ⇒ the size of the property is great, the facilities are poor. aesthetics ⇒ old properties tend to be outdated models, with facades that are not very popular nowadays. renovation potential ⇒ this house certainly has a lot of renovation potential which can actually be good. other factors including interest rates, economic outlook, changing demographics, investment potential, and energy efficiency are very hard to determine for this example.

The three negative factors that can lower the value of this property are: demand, facilities and aesthetics. But a good location and size will probably offset them easily.