If you are looking to sell your Milwaukee house, one of the first things you need to do is to value your property the right way. Even if you don’t plan your move, knowing the value of your house can benefit you in many ways.
No matter what life changes you might be going through – divorce, retirement, a new family member – being a homeowner is a way to improve your life at any stage. Knowing how to value your property appropriately can help you in many ways even if you don’t plan to make a sale of your house. Below are several reasons why this is important, as well as how you can precisely determine the value of your property.
How Do You Value Your Property Appropriately?
There are several different ways to determine the value of your property. We’ll discuss several most common methods.
1. Comparative Market Analysis
The best ‘amateur’ way to determine the value of your property is to get a comparative market analysis. In other words, you can compare the price of your property with the local houses that have the same features and look for how much they’ve sold in the past six months. This can be done by your Milwaukee real estate agent and it usually serves for listing purposes. Some real estate agents won’t charge you for this, but keep in mind that they will expect that you work with them in return.
2. FHFA House Price Index
If you want to avoid working with an agent but you still want to value your property the right way, you can calculate it via the Federal Housing Financing Agency’s (FHFA) house price index calculator, which uses a fairly scientific approach. This tool works with the help of ‘repeat sales method’, which means that it can track a change of a house’s value from one sale to the next, and use this knowledge to determine fluctuation of a value. However, even this method isn’t without flaws, as it can only look at conforming mortgage values and isn’t adjusted for seasons or events such as inflation.
3. Hire a Professional
If you are planning on selling your property, know that all lenders will require to value your property before they approve the loan to the buyer. As an owner, however, you can always hire a professional appraiser by yourself to help you with the official price determination. When evaluating, appraisers will look into the local market, your own property and also comparable properties in the area. All of this will be completed in one final report that will be delivered to you.
4. Online Tools
There are numerous online tools that serve to value your property. You can only google the term and you’ll find dozen of online estimators. They use public records such as deeds of ownership, property transfers and tax assessments joined with mathematical modeling, and they try to estimate your house’s value based on recent listing prices and sales in the neighborhood. However, they should be used for marketing purposes and shouldn’t be taken as a fact, as the data they have is often limited.
Why You Should Value Your Property Even When You’re Not Selling?
It’s important to know that, even though the real estate market is usually considered to be illiquid, the housing prices still change over time, especially in times such as world crisis or inflation. You don’t have to be planning a sale of your property to know how to value your property appropriately. Here’s why:
Whether it’s retirement or covering your assets, you should always know how much value your property has. This will be beneficial later in life, when you decide you want to live mortgage free or to leave something behind. The best way to make smart decisions in life is to know how much you have.
No one looks forward to events that can cause litigation, however sometimes it has to happen. No matter if it is a divorce or death of a family member, having a way to value your property is important when it comes to resolving disputes that involve property.
Your taxes depend on the value of your property. When the value rises, so do the taxes. However, if you think your taxes are unreasonably high, you can fight this by arranging your own appraisal and proving that the value is lower than the state determined.
If you are looking to renovate your property to increase the value of your house, it might be a good choice to estimate your property value beforehand. Ask a professional appraiser what are the right investments, and how much your house will be worth after major renovation changes. Sometimes you might think that an improvement will do wonders for your house’s value, while the truth is that you’ll pay more than you’ll gain.
If the value of your house was wrongly valued and some disaster happens, you might end up empty handed. Insurance doesn’t care if your house has increased in value and this is something that you should look after by yourself.
For most people, their property is their most important asset. You must value your property at the right amount if there ever comes a situation where you file for bankruptcy. Getting a professional appraisal will ensure that you get the fair value of your house.