Wed May 30 2018
Do you know how much your home is worth? We’re not talking about what you paid for your home – that value has probably changed. Home improvements, a new neighborhood school, and even your landscaping can affect your home’s value.
Getting your home reappraised is the only way to know what your home is currently worth. Of course, this information is only useful for certain situations. A good rule of thumb is to get your home reappraised when you’re considering making a major life change that involves your home.
Let’s take a look at the financial, home-related, and external reasons to get your home reappraised.
Sometimes a reappraisal makes sense when you’re about to make a big financial decision. For example, you might get your home reappraised when:
Updates to the home can increase its value. That includes:
G. Stacy Sirmans, real estate professor at Florida State University, recommends that homeowners start with minor improvements to the bathroom and kitchen. He also says that wood flooring, landscaping, and an enclosed garage can drive up appraisal values.
It also helps to document the improvements with before and after photos. You can show these to your home appraiser to help them make a more accurate estimation of the value these renovations created.
These factors that are outside your control can impact the value of your home:
Don’t be afraid to do your own research to get a better feel of your neighborhood’s value. Talk to your neighbors about their own home appraisals and what factors the appraiser noted. Home appraisals are often on public record, too.
Ideally, your home appraiser should live within a 10-mile radius of your home so they are familiar with the area. If they aren’t, don’t be afraid to explain to your home appraiser the selling points of your neighborhood. This may help prevent your home from being undervalued.
A reappraisal will tell you the value of your home, but that isn’t what the cost of your dwelling insurance is based on. Home insurance companies consider the replacement cost of your home when offering and pricing your coverage. The replacement cost is how much it would be to rebuild your home with similar, new materials. This figure doesn’t take into account the intangibles that make your home appealing to, say, potential homebuyers (such as a good school district or local amenities).
So regardless of whether your home increases or decreases in value, your reappraisal typically won’t impact your home insurance premiums. However, if your home increases in value because you remodeled the kitchen with top-of-the-line appliances, you should give your home insurance company a call. You want to make sure your personal property coverage is still appropriate if you ever need to repair or replace those shiny new items.
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