How much is my home worth?

TurnersTips is glad to present a discussion on who says how much your home is worth. The real estate agent is going to consider what price you can get for the house and the land it sits on. For their information, go to an MLS listing or the local newspaper.

Consider every home will have a sentimental value that cannot be added in. A true value is the the amount owed on the mortgage. The lender is going to be concerned that there is adequate insurance in case it needs to be paid out.

The insurance company is concerned about the reconstruction cost of the home.So if you have a partial loss or a total loss you will need to rebuild. Building in an already developed area is going to be more expensive then building one house after another on a new street.

You will need to have a notation of "Guaranteed Replacement Cost" (GRC) on your home to cover any event that could occur. Often the lenders demand that this coverage is shown before they provide financing on a property. To get this GRC you complete a schedule acceptable to the insurance company.

Like most things in insurance, there are few "set in stone" answers. You go to one broker, answer questions and fill out a form to get one answer on what the reconstruction value is of your home. You could go down the street and get a different answer. Which one is right?

Please consider the discussion paper below which has been given to us by Stephen Tang. Stephen has many years experience as an underwriter and an insurance broker. Feel free to post your comments to our Forum if you would like to discuss this topic further.

Discussion paper on home replacement values