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5 Reasons Why You Should Know The Value of Your Home

5 Reasons Why You Should Know The Value of Your Home

Your home is your greatest asset. When you know your home’s true value in the current market, you are empowered to make informed decisions regarding your property. Whether a sale is imminent or not, determining how much your home is worth will help you become ready for your next steps. When opportunities come up or life throws a curveball – may it be a new job in another area or you a change in your financial situation – you will be ready and can make your investment work for you.

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1. Homeowners Insurance

When you purchased your home and drew up an insurance policy, it should have covered at least what you paid for your property. But, after a few years of paying your mortgage and doing some upgrades, your home has likely increased in value. In this case, it might be time to reevaluate your homeowners insurance policy. You can set up a meeting with your insurance company for a refresher on your coverage policy. Knowing your home’s value will make sure you’re covered for the cost of its full value if something were to happen.

2. Property Taxes

Your property tax bill is based on the assessed value of your property, and factors such as your property’s size, construction type, age, and location can affect it. If you think your city or municipality has appraised your property value too high, you can appeal your tax bill. 

You can complete a formal appraisal in order to find the accurate value of your home, and bring this appraisal to the Assessment Review Board to support your case that you’re paying too much in property tax compared to the market.

3. Home Equity

When you find the value of your home, you’ll know how much equity you’ve built up. And when you reach the point where the value of your home is more than what you owe in mortgage, you may be able to take out a Home Equity Line of Credit or HELOC. This loan uses that equity as a collateral and can be repaid on a fixed interest rate. You can use this fund to give you more financial flexibility, such as to get financing to start home improvements that will add value to your home, or even invest in a second property.

Likewise, if you’re thinking of refinancing so you can capitalize on today’s low mortgage rates, the more equity you have in your home, the better is your chance to qualify for a more desirable loan term.

4. Home Improvements and Repairs

Knowing your home’s value is also crucial to help you decide if upgrades or repairs are in order. You want to understand where your property value is starting at, as it will give you a good basis for determining what you want to do with it. You want to make sure that any improvements you make will not only make your home comfortable to live in, but will also potentially increase the value of your property. 

It’s a good idea to prioritize projects that will enhance your home’s value, such as a kitchen or bathroom remodel, to ensure that the renovation costs will pay off. Also, you want to make sure that your upgrades match the other homes or “comparables” in your neighbourhood if a return on investment is important to you. You can reach out to your Realtor to discuss comparable properties and home renovation trends before you start your project. You real estate professional can also give you recommendations for trusted local businesses and tradespeople, plus exclusive discounts for custom cabinetry, landscaping, junk removal, and everything in between!

5. Selling Your Home

Whether you’re looking to sell your home in the near future, or you’re planning a resize for yourself or family over the next couple of years, it’s important to have an understanding of where your home fits into the current real estate market. You don’t need to be a real estate aficionado to know that our local market is currently experiencing an extremely strong seller’s market, mirroring the conditions we saw in 2017. Dramatically low home inventory levels coupled with a steady stream of active & qualified buyers means that homes in Guelph & area are selling faster and for more money than ever. In fact, homes in Guelph are worth 10.7% more than they were last year*, and 60.8% more than they were 5 years ago**.

Due to an influx of GTA buyers, Guelph’s changing landscape, and record-breaking market conditions, your home may be worth much more than it was just a few year ago, regardless of any updates or improvements you’ve done. An accurate home evaluation done by a real estate professional is the first step to a successful home sale, and is necessary in helping you understand your affordability when it comes to buying a new house.

SOURCE: Sales data from Ontario Regional Technology and Information Services MLS® for all property types in the City of Guelph; data points are median sales price over a rolling 12 months: $550,000 (July 2020) vs. $497,000 (July 2019); **$550,000 (July 2020) vs. $342,000 (July 2015).

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