Jun 11
7
Financial awareness for women over 50–know the value of your home
Women over 50 need to be aware of their financial position, whether married or single. Financial Expert Camille Gaines shares some insight on perhaps our biggest financial asset, our home.
Many financial experts think that your home and mortgage should be excluded from your net worth equation; I disagree. It is often suggested that a home be excluded since it typically creates expenses rather than revenue, and, therefore, should not be considered an asset. Others promote that since your home is more of a personal asset, it does not belong on your financial net worth statement.
Your home can be one of your largest investments; therefore, to not include it in your net worth equation discounts your net worth. If, however, you owe more on your mortgage than what your home is worth, excluding it would overstate your net worth. Either way, the value of your home and the amount of your mortgage are important numbers in your net worth calculation because they can greatly affect your financial picture.
You may be unsure about the value to use for your home. Since your home could be your largest asset, or liability, it’s important to know it’s true worth. Information provided from outside sources may not be reliable. We learned this during the mid to late 2000’s when appraisers were overvaluing homes in order to allow the banks to make larger loans against home value. Also, sometimes realtors overstate the value with the hope of getting a listing on your property.
Be knowledgeable about the value of your home, whether or not you have plans to sell it in the near future. You’ll need an accurate value for your net worth statement, or, as I like to call it, your Own and Owe statement. Here are some suggestions for getting the real value of your home:
- Attend open houses in your neighborhood
- Occasionally check online for recent sales in your area for comparable homes
- Collect sales brochures; Keep them in a file so you can reference them
- Contact a realtor that specializes in your neighborhood to get comparable home sales; be aware that data for homes sold by owners may not be provided
Notice the sales price per square foot in the information you gather. You can then take the square footage of your home and multiply it by the average sales price that you are seeing in your area. Be sure to use square footage prices for comparable homes with regard to age, condition, remodeling, location and lot size. Anything with a value as large as your home deserves a little tracking so you know the real value of this important asset. Besides, don’t you think it’s fun to see inside the houses in your neighborhood?
