Most people think that home appraisals are only necessary when buying and selling a home. However, there are many other times that knowing the value of your home can save you a lot of money, including deciding whether or not to do renovations, tax savings, and planning for your retirement.
A major part of buying and selling a home is getting an independent, unbiased appraisal of the property’s value. When a home buyer asks a bank to lend them money, the bank needs to make sure that the property is worth what the buyer is paying for. The appraisal serves as an insurance policy for the bank, in case the buyer can no longer afford to payback their mortgage, the bank can sell the property for what it’s worth and recoup their money.
What the bank does is compare your home’s features and values to other comparable homes in the same neighborhood that have been recently sold. With the rise of the internet and popularity of real estate apps, untrained homeowners can now see homes sold recently in their neighborhood and can come up with a rough estimate of their own home’s value. The problem with these estimates is that you aren’t able to get the whole picture from just sales numbers.
Did one of the recently sold homes have a brand new roof? Did they renovate the entire kitchen before selling? Do they have a deck? If so, how big is it? All of these factors increase the price of a home drastically. That’s why getting your home appraised by an experienced home assessment firm is necessary. They are able to give you a more precise answer on how much your home is actually worth. The costs of these appraisals are a lot lower than you think and some companies actually offer their services for free!
There are the obvious benefits of getting a true appraisal done on a home including when trying to refinance your home or applying for home equity loans. But there are other added benefits that people rarely think about.
Thinking about doing a renovation to your home? Knowing the true value of your home is incredibly important when making major renovation decisions. If your home is already at the top of the range in your neighborhood, doing renovations that typically add value to homes could actually lose you money.
On the other hand, if your home’s property value is less than the others in the neighborhood, doing certain renovations can increase the value of your home by a lot, so much so that your renovation investment could prove to double in value added.
Property taxes are also determined using the rough estimate method mentioned above. If all the homes that were sold recently were updated and improved, comparing your home to their values is completely bonkers. Knowing how to dispute those estimates start by getting a true appraisal of your home first.
A home is almost definitely the biggest asset you have and its value plays a huge role on how comfortable you’ll be after you retire. Sure, there are people that buy a home planning on living there until their last breath, but most people plan on selling their houses when they are older and downsize to something more manageable, using the extra money they gained for other living expenses or luxuries.
Even if you aren’t close to retiring, getting an accurate appraisal of your home every few years is recommended. Knowing how much your home’s value increases (or sometimes decreases) every few years can go a long way into planning for your retirement one day. Often times, homeowners don’t realize that the increase in value gained over time from their home can actually allow them to retire earlier than expected. Get a leg up and contact an experienced home appraisal company today.