A property valuation doesn’t just help you gauge your home’s market value. It’s also beneficial in several other situations ─ when you’re selling your home, refinancing your mortgage, or buying insurance.
Here are some essential reasons why you should regularly schedule property valuations as part of your wealth management plan:
1. To Sell Smart
Getting a pre-sale property valuation is an intelligent move. You have to know the accurate price of your home to attract the right kind of attention. If you over or undersell, you risk selling at a loss or getting no interested buyers.
Property prices depend on various factors, from inflation and economic meltdowns to market sentiment. Having an up-to-date valuation keeps you in charge and streamlines the selling process.
2. To Buy in the Know
As a first-time buyer, it’s easy to get caught in the thrill and excitement of homeownership. But, unfortunately, this inexperience can lead to many missed opportunities.
For example, you might presume that your bank will approve your mortgage for the total price of the home’s market price. However, the truth is that your approved mortgage is based on the property’s appraised value, not its “list” or purchase price. Therefore, if the list price exceeds the appraised value, your bank may not approve a loan amounting to the property’s purchase price.
So, before you close the deal, or sign any agreement, make sure you collaborate with your lender and get a third-party independent appraisal on your future home. This way, you’ll avoid any letdowns resulting from inadequate real estate knowledge.
3. For Retirement Planning
That’s why you have to make smart financial decisions before your retirement catches up. For instance, you have to think about the possibility of downsizing to a more manageable estate.
To prepare for such changes, you need an independent property valuation to know where you stand and where you want to go from there.
4. To Take Out Property Insurance
Are you taking out property insurance? First, you’ll need a fair valuation.
If you don’t know your property’s accurate value, you might understate it, and your coverage might not cover a significant chunk of your home’s damages. On the other hand, overvaluing your property may also hurt you. You might end up paying an insurance premium that may considerably add to your arrears over the years.
5. To Remortgage
A lender’s requirements for remortgaging depend on several factors, including your property’s appraised value.
Getting a valuation can work to your advantage in some cases. For example, if your property’s value appreciates, you can qualify for more attractive mortgage products.
To make sure you’re aware of what kind of mortgage fits your property, make a valuation an integral component of your remortgaging process.
6. For Estate Planning
Estate planning is essential for a whole host of reasons. For starters, it ensures that your wealth is fairly distributed at the time of your death, preventing any family disputes or complications. You also protect the interests of your children, making sure they’re taken care of in your absence.
Getting an independent valuation conducted on your property helps craft an informed estate plan to help protect your family’s future.
7. To Set a Competitive Rental Price
The housing market doesn’t constantly adjust for economic issues, such as inflation. A detailed valuation report can keep you current and help you better understand the monthly rent you need to set.
8. To Avoid Overcapitalizing
Many homeowners think that the more they spend on renovating, the better the return on investment. However, that’s not always the case. So before breaking the bank on a significant remodel, make sure you’re hedging your bets on the right upgrades.
Designated appraisers can nudge you in the right direction. Their detailed reports can help you decide which renovations will increase your property’s value and which won’t.
Several factors play into this. For example, if you’re adding a new bathroom to your home in a neighborhood where the sentiment is skewed towards more living space, your investment could go wrong. A valuation report can open your eyes to these underlying dynamics.
It’s in your best interest to get a fair and independent property valuation. To make the right financial and real estate calls, you need to stay adrift of your wealth’s changing economic situation. A property valuation is integral to this process.
Article Submitted By Community Writer