Do you really know the current value of your home?
Feb 12, 2020 17:17
At some point, you’ll want to know about your home value. After all it’s probably the largest single investment you’ll ever make in your life, so it’s wise to keep abreast of its market value.
You might be looking to move due to a job relocation or, maybe, it’s just that the kids have grown up and are at college and you want to downsize. On the other hand, maybe it’s not a move at all and perhaps you need money for a house extension and/or wish to refinance. Or it could be that you need to buy a new home insurance policy or even release some of the equity you have built up in your home over the years.
Of course, everyone has their own opinion of the value of their home, but it’s important to understand what constitutes and determines market value and what factors help with an assessment of this figure. It’s equally important to know what factors do not. The basic maxim is that “cost does NOT necessarily equal value”, yet many home owners conveniently overlook this point. As a result, they over inflate the perceived value or asking price for their home with the result that they cannot sell it or get the amount of loan they want.
Some owners have a formula which goes something like this: the value of my home is what I paid for it, plus the cost of improvements (structural and decorative) I’ve made, plus an amount for all the good times we spent there, plus 20% because it’s my house with my color scheme and furniture…. Don’t worry, I say this “tongue in cheek” but you get the picture, right?
In reality, the value of your home is based on current market conditions or the amount the house is likely to sell for if it was placed on the market at this point in time. The market value of the home is what a buyer is prepared to pay for the home having regard to a myriad of factors; and what you as seller are prepared to sell it for.
The state of the local, national and even international economy can have a bearing on the value of your home, but so can the time of year you list it (is it low season for home sales, for example?).
Then there are considerations such as how many similar houses are currently for sale in the market; the number of bedrooms, living rooms, the built-up area/size of the house, the plot size and also, importantly, the quality and nature of your neighborhood. Are you in a safe neighborhood with good proximity to amenities such a shopping, service providers, schools and main highway routes, for example?
For an objective estimate of your home value it’s well worth to undertake some careful research and get quotations from several top realtors.
Be sure also to look at ways to increase your home's value before you finally decide to place your property on the market. You may be surprised how with relatively limited expenditure on technological based items you can enhance the attraction, and hence value and salability, of your home.
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