What Is Your Home Really Worth?

What Is Your Home Really Worth?

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Our county just went through a lengthy property revaluation process which took nearly two years to complete. Every home in Wake County, North Carolina was reassessed which was the first full revaluation of property values of its kind in eight years. As was to be expected, there were some people who were pleased with the latest figures as their home’s value was put closer to a hoped for selling price while others felt that the work was done sloppily and unevenly. One neighbor plans to appeal, a right that every taxpayer has and one that they should exercise if they believe that their revaluation was done incorrectly.Do you know what your home is really worth? Chances are that it has gone up in value since you purchased it and, if it has, there are some compelling reasons why you should seek an independent home valuation. Let’s explore what a home valuation report does and why it may be a good idea for you to order one.

Local Governments, Periodic Revaluations

Your local government (county, town or city) will reassess property values from time to time. State law requires that this be done with each state setting the timeframe in which revaluations must be completed (e.g., once every eight years). When the revaluations have been completed, homeowners are notified usually through a notice received in the mail.

Revaluations And Taxes

What sends a shudder through many a homeowner is finding that their home’s value has increased dramatically since the last revaluation. Although a home that is worth much more can command a higher selling price, it can also mean that the homeowner will pay significantly higher taxes.

Before panicking, homeowners should realize that as a home’s value has gone up, the tax rate should go down (the amount paid per each $100 of the home’s value). This means that if your home was worth $200,000 and your tax rate was .074 per $100, then your taxes are $1480 annually. If your home is revalued to $320,000 and the tax rate stays the same, then your new tax bill would be $2368. However, your local governing body would likely drop the rate per $100 in order to lessen the blow, but we all know that with any type of property revaluation it can be an “excuse” for politicians to raise taxes.

What Should You Do?

If you believe that the new value of your home is too high, then order an independent valuation and use the findings from that report to appeal your increase. In some jurisdictions, the revaluation will come first and then the new tax bill will arrive many months later. Why wait to learn if your taxes have jumped up significantly later on when appealing now makes the most sense? Anyway, in many cases you have a certain timeframe in which a revaluation can be appealed — you need to take action as soon as possible or risk finding that your appeal was filed too late.

You Can Cancel Private Mortgage Insurance (PMI)

If you have a mortgage on your home and you’re also paying private mortgage insurance (PMI) then a home revaluation can work for you. Don’t wait for the town to do their periodic update — you can order a report and see if your home’s valuation has increased to the point where you can cancel PMI. It isn’t uncommon for homeowners to still pay PMI well after their house’s value went up. Still, the burden of proof is on you and you’ll need to submit a copy of the valuation report to your mortgage company.

Lastly, a home valuation report can help you get the best price for your home in the event you plan on selling it. Local property values and recent sales (plus improvements) will all be considered to determine your home’s value. Ultimately, a home valuation report will protect your interests, something every homeowner should consider ordering independently.

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