You might spend weeks browsing paint colours, going back and forth on listings, comparing mortgage options, before finally realising you have been skipping the most important question as to why you made each of these choices: What is my house actually worth today?
This seems so simple. Perhaps too simple. However, once you are planning on making a major change (emotionally or financially) regarding your home, overestimating can quickly turn into overspending.
This is a collaborative post.
Know The Value Of Your Home Before You Change The Plans
There is nothing like taking down a wall, adding a garden office or replacing the kitchen to remind you of how unsure you were of the overall value of your home. Not how much you want your home to be valued. Not how much the house down the street sold for this past summer. Where your home currently stands.
A property valuation provides you with a foundation based upon current market conditions, the location of your home, the state of your home and what potential buyers are truly attracted to. This allows you to assess if a renovation will provide real added value to your home, or merely create an aesthetically pleasing environment for yourself while possibly not providing long-term financial gain.
This doesn’t mean every decision should be based upon profit alone. People live in homes; they don’t calculate them. However, having clarity gives you the ability to make informed decisions.
Renovations Are Not Always The Best Option As Your First Step
It’s easy to assume that by upgrading your home, you will also upgrade its value. In many cases, you will. Some areas of the home, such as a dated bathroom, inefficient use of space and an unkept exterior, can quietly bring down your home’s value. By addressing these issues, you can significantly impact your home’s overall value.
However, some renovations are simply more costly than they are profitable. For example, a highly personalised kitchen, luxury finishes that are outside of a particular price range or an addition that encroaches upon your garden can make your home difficult to sell.
Before spending tens of thousands of dollars, consider the following questions: what are the needs of the home, what does the local marketplace reward, and does the work resolve a true problem? Taking a moment to think clearly about these factors could help you avoid investing time and money into renovating for someone who may never exist.
The Same Clarity Applies When Considering Moving Or Remortgaging
Whether you’re considering moving or remortgaging, understanding your home’s expected selling price will give you the opportunity to develop a solid plan. Your home’s estimated selling price will directly influence your required down payment, geographic search area, timing requirements and your flexibility during negotiations. For homeowners relocating to Alberta, experienced movers in Edmonton can coordinate packing, heavy lifting and secure transportation around the timeline shaped by those financial decisions.
When considering remortgaging, the estimated value of your home plays a role, but in a different capacity. How high or low of a loan to value ratio do you qualify for? Which interest rates and terms are available to you? How confident will you feel when approaching the remortgage process?
Without this type of information, you may find yourself developing a plan based on estimates. Estimates often evolve into stressors further along in the process.
Beginning From The Bottom Up
Large home-related decisions can feel emotional due to their reach across many aspects, including: finances, families, routines, plans for the future and even the quiet comfort associated with living in a specific place.
Therefore, begin with small steps. Begin with facts. Before meeting with a contractor, before meeting with an estate agent and before submitting your mortgage application, understand your existing home.
Once you have a better grasp of your existing home, typically the next step becomes somewhat clearer.