You probably do not think of home appraisals as part of the estate planning process, but it can be a very important component. When estate planning, one of your biggest assets is most likely your house. A home appraisal can come in handy in a number of ways when mapping out how to pass assets on to the next generation, especially if you are reaching retirement age.
Generally, appraisals are most commonly used in sale transactions or during the refinancing process, but there are a number of reasons why a homeowner might solicit the services of a professional home appraiser. Regardless of the goal of the appraisal, it is used to determine an estimate of what the home is worth on the real estate market.
When it comes to retirement and estate planning, knowing the appraisal value of your home can help determine if it is best to keep it in the family or sell the property, while balancing this information against other factors.
While working with a qualified financial advisor or estate planner, they need to know what they are working with in terms of assets and their value. With real estate, many people overestimate how much their current home is actually worth, perhaps based off what friends or neighbors say. One way to get a sense of the home’s value is to visit an online website that provides a basic estimate. However, these online tools do not take into account any renovations or updates to the property you may have made. Only a home appraisal can truly tell you what the home value actually is.
If your approach is to sell your house and possibly downsize, having an idea of what your home is worth will put you in a good position to make a prudent decision. You most likely have owned your home for a long time and may be out of touch with the real estate market. Knowing your home value will give you a sense of what you will have to pay for the type of house you want to buy.
Moving to a new area also poses some challenges. Home values in your neighborhood will not be the same if you plan to move to somewhere closer to family or to a place you have long enjoyed visiting. There may also be tax implications if moving to a new state. This included property tax, sales tax and also income tax. Make sure to spend the time understanding the new locale, or perhaps consider renting before buying.
The bottom line is to do your research and understand how real estate may affect your estate and retirement planning. A home appraisal can play a critical part in this process regardless of whether you decide to stay put or move
Have a Question for the Appraisal Experts?
At Appraisals Unlimited, we have many years of experience conducting insurance appraisals. Give us a call at 781-449-7600 or email us at firstname.lastname@example.org to find out more.