Do you know how much your property is worth? Why is that important? For the majority of homeowners, owning a home is more than just a place to live, it’s an investment in their future. Values of properties fluctuate depending on the national economy as we have seen in the last couple of years across Canada, so what you purchased your home for might not be how much it’s worth today. If you’re living in your home and going to be living there for the foreseeable future than you should absolutely care about its current market value.
The current market value is important for a variety of reasons:
- Property tax
- Financial planning
- And, of course, selling your home
Many homeowners make the big mistake of using the original purchase price of the home when getting a quote for home insurance. This can lead to much higher premium. The rule of thumb is that homeowners should use the rebuilding cost of the home i.e. what it would cost to rebuild the home if it were affected by an unforeseen issue, like a fire.
Your property tax is determined by the value of the property multiplied by the tax rate (or, “mill rate”) and expressed as dollars of tax per $1,000 of assessed value. So, the value of your home is important when understanding your property taxes and how much you need to budget for those if the home value is due to change.
When planning for your financial growth and stability, it’s incredibly important to keep a finger on the pulse of all your assets! Before making any major decisions about your financial future, especially selling, trading up, or upgrading your home, knowing the current market value can help you determine which option is best for you.
Selling Your Home
It’s obvious that when selling your home you need to know how much it’s worth. A property that is listed too high will not sell as quickly and “go stale”. A property priced too low will most likely sell fast, but you’ll lose out on potential profits. It’s very important to get a professional to assess the value of your property and get their expert opinion.