In every market at every price point, home buyers are faced with tradeoffs they must make. The more sophisticated the sense of the compromises in any given town and its housing stock, the easier the search and the better the result. If you are buying a home with a partner, this becomes even more challenging. Surprisingly there really very few resources available to help you do this. Thankfully The DuPont Group & sister company REAVN with its HomeSmart buyer tutorials are here to help you make the BEST purchase given you budget and needs!


The DuPont Group partners with sister company REAVN HomeSmart Systems to give buyers a much more granular view on home value and pricing than has ever been available before. HomeSmart allows you to compare different homes “Elements of Value” at a deeper and more granular level and allows you to calculate the incremental cost of things like a better School District or view, and/or variations in design/flow, finish or condition. If you take the time to really learn how the pricing in your real estate markets works, you will have an information advantage over other buyers in the marketplace.

What makes a home price?

For every price there is Interplay between its *TWO*  “Primary Elements of Value”: 1) Lot-Location Value (LLV): What the site/lot is worth with all the benefits that flow with the land like public school district and tax base; and 2) Structure Condition Value (SCV): all the improvements which make up the dwelling.


All pricing elements for ANY upmarket home hinge off of the Lot-Location Value (LLV). Over improvement by definition is too much $$$ invested in any given LLV. And Structure Condition Value (SCV)  is a function of its LLV- which is why the exact same home on two different LLV can have much different prices EVEN if the Lot Location Values are similar. Please reference the REAVN HomeSmart Tutorials HERE.


The most important metric for anyone to know about any home they own or are thinking of buying is The Home Value Ratio (HVR) = SCV/LLV.  This HVR ratio is most important relative to the District Ratio which is the Average HVR for the market the property resides in. Properties that have a higher HVR relative to the DR will require greater than average annual investment to receive average market returns.

Lot-Location Value - LLV

LLV has three general bundles of attributes:

  1. Neighborhood/Commuinity/School District/Jurisdiction first,
  2. Location/Proximity/Congestion/Hazard Zone
  3. Site/Lot- the views, the pitch and grade, landscaping, ambient noise, exposure, and privacy.
Structure Condition Value - SCV

Similar to LLV SCV has three general bundles of attributes as well

  1. Design, Flow, Floorplan & Curb Appeal
  2. Finish & Features
    1. includes home size, bedroom/bathroom count
  3. Condition/Maintenance
Home Valuation Ratio - HVR

The Home Value Ratio (HVR) = SCV/LLV.


Quality pertains to the design, craftsmanship and materials used in the construction and improvements to the dwelling(s). Quality is most easily understood as relative metric and most efficiently measured in $/sqft of dwelling space. Note- this metric is not the same as selling $/sqft which includes the Lot-Location Value. This pertains ONLY to the relative dwelling improvements which the market is likely to compensate in an arms-length transaction. Just as Lot-Location Value is a distinct local element of value, so too is the relative price people are willing to pay for Structures in each location- thus Quality like SCV is a function of Lot-Location Value.


While price can be easily measure by Lot-Location Value + Structure Condition Value, VALUE on the other hand needs the added element of Quality which is Structure Condition Value divided by home size. Two homes can have the same Structure-Condition Value, but if one is twice as big as the other, the relative quality of the larger home is lower than the smaller home. Please reference the REAVN HomeSmart tutorials.

Buyer Compromises

At every price point in almost all real estate markets, there are many compromises to be made in the act of selecting a home. Home buyer success is greatly aided by a very specific and refined understanding and selection of the optimum bundle of attributes, aka set of compromises, they are hoping to find.


These compromises can be most efficiently thought of as falling into to general buckets: 1) Those compromises relating to the Lot-Location and 2) Structure-Condition.


The top-level compromises to be made in Lot-Location are: Neighborhood, Community, School District, Municipal Jurisdiction, Location, proximity, Site-Lot quality which includes grade, exposure, ambient noise, privacy, yard etc.


The Top-Level Compromises to me made for Structure-Condition are: Design, flow, floorplan, home size, level of finish, bedroom/bathroom count, condition and maintenance.


Please reference the REAVN HomeSmart tutorials in order to learn a structured process for valuing the relative costs of these trade-offs.

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