As a homeowner, there are several reasons you will want to stay on top of knowing the value of your home. There are a couple of different ways your home is valued and each fluctuates under certain conditions. Your home’s value can change over the years. You might need to know the value because you are getting ready to sell the home, you are looking to refinance your home loan, or you are getting a new insurance quote. Understanding how your home is valued for specific reasons can help you determine your next steps.
Discovering Your Home’s Market Value
When selling your home, you’re going to be looking for market value. This is the price someone would be willing to pay for your home right now. While the home’s condition, size, and features are very important in these calculations, so are other factors like market conditions. If there are very few homes on the market your value can increase. If the market is flooded with homes just like yours, the price can go down.
You can get a general idea of your home’s market value using an online valuation tool like Zillow, but beware, their calculations are based on averages and not your specific home. That means the actual market value can differ quite a bit from their suggested price. To get an accurate market value you can get a home appraisal and consult a real-estate agent to do an analysis for you of the comparable home on the market currently.
Here are some factors that get considered in valuing your home in this way:
- Your home’s construction materials
- The age of your home
- Design of home
- Curb appeals like landscaping and porch design
- Number of bedrooms
- Number of bathrooms
- Square footage
- Storage space
- Garage space
- How much the home has been renovated recently
- Current real estate market trends and conditions
- Nearby attractions or amenities
- How much comparable homes sold for in the area
Calculating Your Home’s Replacement Cost
For home insurance purposes, the home’s value is determined by its replacement cost. There placement cost is an estimate of how much it would cost to rebuild the home in the event of a total loss like a fire. The replacement cost is typically quite a bit less than the market value, and that’s alright. Not many people choose to get their home insured for the full market value because the premium would be too costly.
The replacement cost takes into consideration the square feet, the cost of building materials, the number of rooms, and some of the features of the home. An appraisal can cost $300 - $400 but it is the only specific valuation that can help you get inaccurate home value or the replacement value for insurance purposes.
If it’s been a long time since your home was last valued, and you need to think about selling it or getting a new insurance quote, then an appraisal or home valuation might be necessary to help you make a smart decision. Call us today at Dorsey Insurance in Claremore, OK to help get the replacement value and Home Insurance quote for your home.