Whether you plan to sell or not, every homeowner should get a property valuation. It is critical to have your home valued, especially when it is free with no strings attached. Homeowners should keep in mind that any valuation of their home is an estimate. Even a professional appraisal is an educated guess as to what the property might sell for if it were put on the market. The value of a property is also a snapshot in time because it changes over time: the local housing market may improve or slowdown. In addition, the condition of the house over time will have an effect on its value.
There are several advantages to knowing your home's true value, whether you are staying or selling.
If you are selling your home, you must first determine its value. The net proceeds from the sale of a home are the selling price minus the loan balance minus the selling cost. You most likely already know your loan balance and the selling price in your area. The selling price is the only variable. Getting a better idea of your home's value is an excellent first step if you plan to sell in the near future.
Depending on the loan programme, lenders will allow you to borrow up to 80% of the value of your home. While you must meet other credit criteria, equity in your home is one of the more important underwriting criteria. Up to a point, the more equity you have, the better loan terms you can get. Also, knowing the value of your home tells you how large a mortgage you can get - whether it's refinancing to get a better rate or lower payment, or taking a cash-out to meet other needs.
Renovations and or home improvements are typically made for two reasons: to make the house more comfortable to live in or to prepare the house for sale in order to obtain a higher selling price. If your home is already priced near the top of the market in your neighbourhood, making home improvements may not provide a good return on investment.
For example, if you live in a neighbourhood where the most expensive homes are in the $1 million range and your house is already worth $975,000, even after $50,000 in upgrades, it may not sell for more than $1,000,000. As a result, all of the money and time invested could be not worth it in the end. Understanding the value of your home and the neighbourhood in which you live should be the first step before embarking on costly renovations.
HOME EQUITY LINE OF CREDIT (HELOC)
If your interest rate is lower than the market, refinancing your mortgage to obtain a cash-out may not be the best option. If you want to borrow money against your home, getting a Home Equity Line of Credit (HELOC) as a second mortgage is a much better option. However, just like a refinance loan, HELOCs require that you have a certain amount of equity in your home, typically between 20% and 25%. Again, knowing the value of your home will help you determine whether you qualify for a HELOC.
Perhaps you have no immediate plans to do any of the above. Keeping track of your home's value is still a good idea. Situations and plans may change in the future, sometimes unintentionally. So knowing the value of your home will help you take the next steps when you are ready or when life throws you a curve ball.
Hopefully, you are now reassured that knowing the value of your home can be extremely beneficial. Through the Comparative Market Analysis (CMA), I can evaluate the prices of properties similar to yours that have recently sold in your area. This analysis will give you a better idea of your property's market value, one of the first - and essential! - steps as you prepare to sell your home. All it takes is a few quick minutes to complete and submit the form below. Then let my system do the work for you! I'll contact you as soon as I have the results.