Why it is important to know the worth of your home
For most people, the question ‘what’s my home worth’ is one that comes up only when the decision to sell has been made. In the heat of that moment, we’re quick to turn to the realtor and ask, will selling my condo in Silicon Valley provide enough cash to offset my huge college debt? How much do I get after the mortgage loan has been taken off the selling price? Or in other words what’s the homeowner’s equity of my home? While it’s understandable that most people often ignore valuating their houses, it’s interesting to note that knowing the actual worth of your home is quite beneficial. How you may ask;
You’ll be needing it when you’re ready to get your house insured
Amongst other details required by your insurance broker for processing your building insurance, the worth of your home in terms of its current market value and rebuild costs are vital requirements. The current market value of your home as the name denotes, is a fair estimate of how much a building like your retails in the current market; the rebuild cost is the amount of money it’d take to reconstruct your home from scratch. Typically, the rebuild cost of your home should be slightly lower than its market value. Both are however indicative of the actual value of your house. Knowledge of both costs is essential because it allows you to insure your home correctly – underinsure and you’re left to cover additional costs in the event of damage. Over insure, and you’re basically throwing money to the wind.
It helps you pay taxes the right way
The property tax you pay for your home is calculated from its assessed value, i.e., the dollar value of your home assigned by the appropriate local authority. Usually, this is derived from its market value (though most times it is lower). As is with the rebuild cost, knowledge of your homes assessed value helps you figure out how much taxes you should be paying. Too small and we’re talking government fines, too much, well, another case of money to the winds. More so, If you’re unaware of the assessed value of the government is using to evaluate your home, then it is almost impossible to spot errors (trust us, cases of government municipalities shooting up figures are not unheard of), or plan ahead with regards to your budget. And speaking of budgeting,
It helps you stay on top of financial planning
In life, there comes a time when we must make certain decisions – buying a new car, selling your other houses in San Carlos, Belmont, Redwood City, etc. But before going on with such choices, it is essential to take a look back at your financial standings. How much am I worth? How much will I have left if I buy that car? How much will I gain if I sell my Silicon Valley home? Since your house takes a fair share of your current equity, it’s practically impossible to answer these sort of questions correctly without having an idea of home’s worth. Your house’s value adds up to the cumulative that forms your net worth. It could be the difference that allows you to accept that loan to launch your start-up or the limitation that restrains you from buying your dream car.
Finally, It’s essential when you want to sell your home
You can’t sell a house if you’re oblivious to its value – knowing the worth of your home is the first step towards selling it in the retail market. It is what determines your selected asking price and projected profits (or losses). Usually, valuation of this manner is conducted by a professional realtor, after careful assessment of the numerous market variables. It is crucial that this is done right, as aside affecting potentials gains, the value of your home also goes a long way to determine how fast it retails off the market. In this day and age of the real estate market, buyers are well aware of the how the market works, if a house is under or overvalued it is bound to raise suspicion.