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Unless you’re extremely familiar with the current condition of the local real estate market as well as have a thorough understanding of its recent past, you’ll probably not be able to come up with an accurate valuation yourself. The most common and obvious reason to get a professional property valuation is to sell the property at the best possible price, particularly if you intend to sell it privately rather than through an estate agent. However, if you are planning to use a real estate agent or not planning to sell your property at all for the time being, it can still be worth paying for an independent valuation for the following reasons:
#1. You might want a Home Valuation for Home Insurance
According to the Residential Cost Handbook, almost two thirds of homes in the US are under-insured. In the UK, the Daily Telegraph reported in 2011 that a third of households were under-insured. In most cases, these inadequate insurance policies were outdated and failed to take into account rapidly increasing property prices of recent years. For example, if you last insured your home back in 2000, increasing property prices since then may have left you vastly under-insured. It’s often an easy thing to overlook but, it is important to regularly review your insurance policy, preferably once every year when you come to renew it.
A professional property valuation won’t just tell you how much your home is worth in the event you might want to sell it – it will also help to give you a more accurate idea of how much insurance coverage you need. In the case of many higher-value homes, insurers will demand that you have a professional valuation done anyway, and they may insist on providing their own valuator as well. However, it is also important to remember that the value of your home isn’t actually the most important factor when it comes to buildings insurance. Even more important to take into account is the rebuild value, i.e., the cost of rebuilding the property after a disaster.
#2. You may want a Home Value Estimate for Refinancing
When you brought your home in the first place, you might have thought you were getting the best mortgage deal available at the time. Indeed, that might be true but, as interest rates rise and fall around the globe, mortgage rates can change dramatically. For example, some people opt for a fixed-rate mortgage to lock themselves into a set interest rate, but this could lead to you paying more than you need to further down the line should interest rates fall again. For this reason, among many others, refinancing your home at a later date can significantly reduce your monthly outgoings.
If you are planning to refinance your property, a professional valuation is a must, and the mortgage lender will require it anyway. Nonetheless, you should also consider hiring an independent valuator of your own for an unbiased opinion as to how much your home is worth. An initial valuation can, for example, help you to determine whether or not you already own at least 20% of the current market value of their property. This figure is of particular importance, since it’s now almost impossible to get a mortgage of more than 80% of the value of the property. For the best deals, your loan-to-value ratio should be as low as possible.Use an instant home value calculator Now
#3. You might want a property estimate to Increase ROI
Many homeowners consider independent valuations to be something for the real estate investors, but that’s not really the case. After all, any home should also be seen as an investment of sorts, since you’ll likely want to get as high a return on it as possible once it comes to selling up. However, valuations are particularly important when it comes to increasing your return on investment if you intend to carry out any major renovation projects. To ensure you don’t end up losing money when selling your home in the future, you need to make sure you don’t over-capitalize. In other words, you must avoid spending so much that you end up making a loss.
Whether you’re buying a property that you intend to live in or it’s purely an investment project, any property that needs any major work doing to it will need a preliminary valuation as well a later one to help you determine whether or not you’re going to risk over-capitalizing. Additionally, a valuator or a real estate agent, should be able to tell you which renovations, improvements and extensions will add value to the property and which ones might lead to over-capitalizing. For example, expensive changes such as luxury bathrooms or kitchens often don’t add value to a property, while others, such as loft or basement conversions, may do.
#4: You may want to receive a Home Value Estimate because you are thinking of selling your property.
It’s true, you might still be upside down on your property. Many home owners have been delighted to learn that they now have equity while others are discouraged by the negative equity showing on their estimate.
If you need to sell, and are upside down on your home, you could qualify for a short sale.
If you are ready to sell, call 1-800-805-8354 to speak with a specialist in your area that knows your type of situation and property. Equity or Negative Equity, a Ballen Network Agent is right for you.
While there’s no harm in doing some preliminary research yourself, for which the Internet can be a very useful tool, there’s no substitute for a professional, independent valuation. Online tools, for example, cannot give you any more than an extremely approximate idea of the true value of your property. However, a professional valuator will be able to provide many useful insights, such as potential value after carrying out renovations. Whether you’re a buyer or a seller, a professional valuation will make sure that you’re getting a fair price by taking into account many variables that most laymen wouldn’t even consider.
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Call Ballen at 1-800-805-8354 to be paired with a great real estate agent anywhere in the nation.