The Learning Centre:
10 reasons why it’s important to know the real value of your property
From being single… to married with children… all the way to retirement—homeownership is something that changes and evolves in tandem with where you are in life.
The more prepared you are for those changes, the better position you’ll be in to gain the upper hand when it comes to homeownership—particularly financially.
Here are 10 reasons why it’s important to know the real value of your property:
#1: BUYING A PROPERTY
If you’re a first-time home buyer in the early stages of your education career, it can be easy to get caught up in the excitement at the prospect of homeownership. So much so that you mistakenly assume the bank will automatically approve you for a mortgage based on the full amount of the purchase price of the property you want to buy. This is not the case. The amount of your approved mortgage is actually based on the appraised value of the home, not the purchase (or ‘list’) price. If the list price is significantly higher than the appraised value, you may not receive approval on a loan that covers the full amount of the purchase price. So before you sign that purchase agreement, we recommend working with your lender in order to get an independent/third-party appraisal conducted on the property you want to purchase. That way there will be no disappointments when it comes time to purchasing the property of your dreams.
Check out ‘Home-Buying 101: The 4 essential pieces of pre-mortgage homework’ for more first-time home buying tips.
#2: SELLING A PROPERTY
Just as you don’t want to buy a home that is significantly higher than its appraised value, you don’t want to sell a home for significantly lower than what it’s really worth. Getting a third-party appraisal will provide you with a comprehensive market analysis in order to determine the best listing price for your property.
Sellers beware: Here are 3 tips for protecting yourself in a buyer’s market.
#3: PLANNING YOUR ESTATE
Covering your assets is not only important in life—it’s essential if you have any real estate you want to bequeath to your children or other family members after you’re gone. Having an independent valuation conducted on your property will be beneficial to ensure any and all property is fairly distributed upon your death.
How prepared are you? Check out your ‘Estate Planning Checklist’.
#4: RETIREMENT PLANNING
School years come and go. Before you know it, you will have reached your 85 or 90 Factor and collecting your hard earned pension. This is the time of your life when you’ll want to aim to be mortgage-free. It’s also the time when you might consider downsizing to something a little more manageable. As part of your overall wealth plan for retirement, knowing the current value of your home will ensure you make smart financial decisions—whether you’re looking to sell, buy, or both.
Want to be mortgage-free by retirement? Here are 3 simple strategies to pay your mortgage off years faster.
As an education member, you’re no stranger to litigation (i.e. ‘Collective Bargaining’). However, when it comes to litigation where property is involved (such as a divorce or death), getting a designated appraisal is essential in determining the value of any property in question so disputes can be resolved, and property distributed fairly.
#6: PROPERTY TAX ASSESSMENT APPEALS
The one downside to escalating property value: higher property taxes. However, if you feel the tax jump from one year to another is higher than it should be, you can fight it. Most provinces, including Ontario, allow you to get a designated appraiser involved in order to provide you with a third-party property assessment. If that assessment comes out lower than what was listed on your property tax assessment, you can then use it to plead your case (to lower your property taxes) to your municipal tax office.
The more you spend in renovations and upgrades, the higher you’ll be able to sell your home down the road—right? Well, that may not be the case. Before you go sinking money into a major renovation, be sure you are investing in the right upgrades. This is where a designated appraiser can help by providing you with the real value of your property, which factors in all of the renovations you are planning.
Here are 5 money-saving tips for do-it-yourself home renovations.
#8: CAPITAL GAINS
Want to be sure that the capital gains you are reporting on sold property are based on fair market value? Getting an appraisal to determine the real property value can ensure you are paying the right amount of tax.
#9: INSURANCE COVERAGE
Getting a designated appraisal conducted by a third party for insurance purposes is not only a good way to be prepared in the event of theft or damage to your property, it can also help to expedite your claim in the event that something unfortunate happens.
Your home is most likely your most significant asset. If a situation arises where filing for bankruptcy is your only option, getting a designated appraisal will ensure that you get fair market value for your property.
Looking for your first mortgage? Is your current mortgage up for renewal? Do you need to refinance? Get a mortgage that provides real value—exclusively for education members.
No matter where you are on the pay grid, Educators Financial Group can help you uncover ways to maximize cash flow so your first (or existing) mortgage doesn’t drain your finances as much. If you’re searching for a better rate and more flexible options, we have access to multiple lenders, which enables us to offer the rate you want and the flexibility you need. Plus we can review your existing mortgage to ensure it’s actually the right fit for where you are in your education career and in life.
Have one of our Mortgage Agents contact you about our educator-specific mortgage solutions.
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The information provided is general in nature and is provided with the understanding that it may not be relied upon as, nor considered to be, the rendering of tax, legal, accounting or professional advice. Please ensure to consult your accountant and/or legal advisor for specific advice related to your circumstances. Educators Financial Group will not be held responsible or liable for any losses, costs, damages or expenses incurred by reason of reliance as a result of the aforementioned information. The information presented was obtained from sources that are believed to be reliable. However, Educators Financial Group cannot guarantee their completeness or accuracy.