Benjamin Franklin once said: "An investment in knowledge pays the best interest."
If I asked how much you had in the bank at any one time, you could probably open up your banking app and show me your balance or, more than likely, just tell me from memory.
On the other hand, if I asked how much your house was worth or what it would take to rebuild it, you might be stumped.
Here's another question, one that may be easier to answer: What's worth more--the money in your bank account or the equity of your home? Even without knowing the exact value, intuitively, most homeowners know their house is likely worth more.
So where do you go to get the information? Who do you rely on to provide you the market value or replacement cost of your home? The government assessor, the mortgage broker or bank, the insurance broker, your friend the real estate agent?
Before relying on the information these professionals may offer, you should ask yourself this simple question: Are they acting in my best interest or theirs? If the answer could be the latter, then relying on their information may not be the best idea.
We recently helped a client fight his insurance company after a fire loss of his home. The insurance company offered him 50 cents on the dollar for the actual cash value and replacement cost. We ended up going through an insurance appraisal which is essentially a mediated process. Since there was very limited information on the home prior to the loss, many assumptions had to be made. In reality, had the client obtained updated appraisals annually, these could have saved him thousands in professional fees. This is a typical lived situation for thousands of homeowners in Nova Scotia, who are left scrambling when the unexpected happens.
So what is the solution?
Every year, obtain an independent appraisal that includes your home's current market value, current actual cash value, and current replacement cost.
What are the benefits of this?
If your government assessment is more than the appraised market value, you can send in the appraisal for an appeal.
If your insurance company assigns a replacement cost lower than the one listed in the appraisal, you can send in the appraisal to amend the policy, thus avoiding a co-insurance situation after loss.
If there is a loss, you can send the appraisal to your insurance company to negotiate a realistic settlement.
If your mortgage is up for renewal, you can negotiate with the assurance that you have the most up-to-date information and without the stress of wondering whether the value of your home will turn out to be what you expect.
If you own the property with another party and are looking to buy them out or vice versa, an updated appraisal will leave no guesswork for the lawyers or courts.
If you complete significant renovations to the home, a yearly appraisal will give you a clear picture of the home's market value both before and after the renovations.
I could go on. The benefits of having the information when it's needed are not insignificant.
If you're looking to be in the know when it comes to the value of your home, please don't hesitate to contact us. We have yearly subscription options that may suit your needs.
Looking forward to being of service to you.
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