There are a lot of different ways to look at your home. It’s your place of living, socializing, and even working. It’s also a significant portion of your net worth. According to the US Census Department, the “average” home-owning family’s wealth is predominantly centered in their primary residence. So even if you don’t see yourself as an investor, you inadvertently are one by owning a piece of real estate.

As to how much (or whether at all) you should work on your home, that requires an understanding of what home value really is. The textbook Fannie Mae definition is: “the most probable price that a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus.”

In plain English, this means what a typical buyer is willing to pay for the property, in typical market conditions for that property and in that neighborhood, without any funny business occurring in the transaction.

But what is a “typical” buyer, and what are typical market conditions? The frustratingly familiar answer is: it depends! In some neighborhood markets (usually older neighborhoods with lots of first time home buyers), low days on market and multiple offers are the name of the game, whereas luxury markets routinely have long marketing times and complicated terms as part of purchase agreements. Some market segments demand full-blown modern updating to the interior like quartz countertops and tile backsplashes, while other neighborhoods are completely agnostic to those improvements because the real value may be in the land, or the water frontage, or the view, etc. It all varies!

So what’s this secret to knowing what to do for your house? To simplify: make your house conform as much as possible to competing properties as you can. Put yourself in the shoes of a buyer looking at your house. Ask yourself: “if I didn’t buy this house, what other houses would I consider buying instead?” And if you’re ever curious about which properties are truly competing with yours – along with any other questions – consult with a real estate advisor who can provide you prompt and thorough answers!