As the housing market bounces back in many parts of the country, you may be asking, “What’s my home worth?” There could actually be more than one answer. There are potentially three very different price tags based on market value, replacement value, and property tax value.
Market value is the amount homes in your area are bought and sold for. It’s the measure most people think of when they try to estimate their home’s worth or value. Market value is not what you paid for your home, but the going rate for similar homes in your city and neighborhood. Many factors can play into this value like condition, square footage, updates, etc.
Understanding the market value helps you calculate your total net worth and how much equity you have in your home. To calculate equity, subtract the amount you owe on your home form its market value. That figure minus closing expenses would be the profit you should receive from the sale. It is very important to price your home correctly if you plan on selling to give the best shot at a quick sale.
We would be happy to run a comparative market analysis to give a broker’s price opinion of suggested list price. Just call 704-544-0253 or email email@example.com.
Replacement value is another important factor to consider. If your home were destroyed because of natural disaster, replacement costs would cover removing the debris and rebuilding the structure from the ground up based on the construction in your area. Generally you would insure for 100% of the minimum estimated replacement cost. Unless your insurance covers replacement cost, you can run the risk of coming up short if the costs to rebuild your home are more than your coverage will pay.
Property tax value is the number taxing authorities use to calculate your property tax bill. A given home may be taxed by more than one jurisdiction and each may apply its own math. Typically, property tax values are meant to approximate the home’s market value though sometimes there’s a big discrepancy between the two because of outdated assessments or mistakes by assessors. An accurate property tax valuation ensures your tax bill isn’t too low or too high and helps to ensure that your entire tax burden is understood. If the property tax value of your home exceeds the market value, consider contesting the value with your taxing authority.