Knowing the value of your home is essential for homeowners. It is because it could help them very much financially in case of any strain or even if you want to sell it. Some people who build houses stay in it for a while, and when its value has increased, they sell it to earn profits. When you know the value of your home, you can also know what it takes to maintain the value. You are also able to know what you need to increase the value of your home.
Reasons why the value of your home matters
Knowing the resell value
When you want to sell your home, you must be aware of the home’s value. It helps you to prepare in time and to avoid surprises, especially disappointments.
Planning your estates
For people with large estates and many properties, knowing the value of your homes is essential. It helps you to keep track of the value of all your assets.
Knowing the value of your home enables you to pay the correct amount of tax. It has been noted severally that a home’s value could be approximated wrongly, leading to payment of too much property tax.
Some people use their homes as investments. It, therefore, implies that the investment should always be increasing in value with time. They could therefore keep on evaluating this after some time.
Acts as collateral for a loan
Homeowners can use their houses for security when applying for a loan. The financier will take this home if the loan has defaulted. A home with a higher value guarantees you a larger amount of money you can borrow using it as your security.
There are three types of valuations used to calculate your home value estimate
1. Fair market value
Fair market value is the value of a home when you consider the value of other homes in the area. It is often one of the lowest values. The value is often an average of the value of other houses. Fair market value considers the value of other homes which are the same as yours.
2. Appraised value
The appraised value is the value of a home after considering the size of a home, location and the renovations done within the home. It is usually slightly higher than the fair market value depending on the renovations done within it.
3. Assessed value
The assessed value is the value of your home according to the assessment done by tax assessors. This value is the one used to determine how much money you would pay for property tax.
There are other various ways of knowing the value of your home. Online tools have for some time now provided such information. Below are some of the platforms used;
Chase Mortgage Service
In conclusion, homeowners should frequently review and assess their homes to see their actual value.