The Value of Knowing Your Home Value
Considering selling your property? It will cost you ZERO dollars to read this:
Whether you’re a first-time buyer or an experienced investor, an educated home market value analysis by a licensed Realtor (versus a computer-generated report) can dramatically increase the expected value of your property.
As locally-focused agents, our task is to show you how important an appraisal could be so you can get the most out of your property transaction. Seems pretty conventional, however it is less common that we’d like to think, whether selling or buying.
Should you sell?
The answer very much lies on the actual value of the home, and we’ll explain this using a simple formula:
Selling Price minus Loan Balance minus selling cost equals the Net Profit you’ll make post-sale.
Your agent should help you put all that information together if you don’t already have it lined up, and make a comparison to the selling/buying costs in that specific area. If you’re considering to sell your property, this is an ideal starting point.
How does home value help with refinancing?
Here’s another simple concept: the higher the equity you have on your property, the more qualified you’ll be to be approved for more desired loan terms. Although not the only criteria to be considered, the equity will be one of your highest points to be evaluated.
According to homes.com:
lenders generally allow a borrower a maximum of 75% to 96.5% against their property.
Knowing the value of your home will indicate how large of a loan you can acquire, whether refinancing for better rates, cashing-out for emergencies, or simply letting go of a certain property.
Condition of the property: how much do improvements help?
Homes are typically remodeled for 2 purposes: either to upgrade the way you live, or to put the property out in the market. However, the second one may not always be the smartest bet. A market home value analysis will help you determine this, since it will allow you to compare it to neighboring home prices, thus avoiding investing additional funds into improvements, in the case your home is already at the higher end in that area. This could leave you profit-less or even in negative, in some cases. Oddly enough, most homeowners don’t consider this and it would be the Realtor’s responsibility to shed some light on this simple concept that can avoid big losses.
Are you in need of additional income?
Unexpected events may come when owning a property, and with life in general. In most cases, a mortgage refinance will be a commonly used method to get your hands on cash, but what if your interest rate is lower than the current market’s? In that case, a better bet would be to apply for a Home Equity Line of Credit or HELOC, similar in terms to a refinance loan. You will be required to have a certain equity in your home, often a minimum of 20-25%
If you want to know your own home value, start here.
In the end, knowing your home value is another piece of your selling puzzle, but most often could determine if it’d be a right move to put your property in the current market. To receive a complimentary comparative market analysis of your home, click here