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Do your clients know the value of their home? As a real estate professional, you’ve seen firsthand the impact an appraisal can have on the value of a property when it’s brought to market. Unfortunately, many homeowners, especially first-time buyers, do not understand how much an essentially “educated guess” can either increase or decrease the expected value of their home.

From unpredictable activity in the local housing market to an unforeseen foundation problem, the fluctuation of a property’s value can become quite confusing for the average homeowner. The good news is that they have you! You’re the local expert, so it’s your job to emphasize how important an appraisal is and to provide them with suggestions on how they can get the most “bang for their buck” when it comes to their home. Whether they’re buying or selling, here are 5 reasons your clients should always know the value of their home.

1. Should we sell? Deciding whether it’s a good time to sell depends heavily on the value of a home. It’s a pretty simple concept to explain; the net proceeds they will make after selling their house is the selling price, minus their loan balance, minus the selling cost. Since the money is coming out of their account each month, odds are, the homeowner already knows the balance of their loan. But if they don’t, explain to them how they can find that information in addition to the prevailing selling costs in your area. If they were to ever consider selling their home, this would be one of the first places to start.

2. Is refinancing a good idea? To a certain degree, the more equity that a client or prospect has in their home will allow them to qualify for more desired loan terms. Although they will need to qualify for other credit considerations, the equity they have in their house is one of the more critical underwriting criteria. With that said, depending on the loan program, lenders generally allow a borrower a maximum of 75% to 96.5% against their property. Knowing the value of their home will shed some light on how big of a mortgage they can take; regardless of if they’re refinancing to get a better rate, obtain a lower payment, or take a cash-out to help with other financial needs, knowing the value of their home plays a big part in it.

3. Will home improvements help? When homeowners are debating whether they should come to market, they’ll start thinking about all the upgrades they can do to maximize the value of their home. While this can be a great decision in some cases, it’s not always the best idea. Home improvements are made for two reasons – making the house more comfortable to live in and preparing the house for sale to obtain a better sales price. What most homeowners don’t realize or may never consider is the value of other homes in their neighborhood. If a home is already at the higher end of a neighborhood, making improvements could lead to little profits, or worse, put them in the hole. Stop them from wasting time and money by explaining this concept before they even begin to consider making any drastic changes to their home.

4. What if we need additional income? This can be a difficult concept for many homeowners because there are so many moving parts to consider. In today’s economy, many homeowners are looking for additional sources of income to cover those out of the blue expenses that come with owning a home and any other unexpected costs. Many will consider refinancing their mortgage to get a cash-out, but it may not be a good move, especially if their interest rate is lower than the current market rate. In such a case, clarify to them that applying for a Home Equity Line of Credit (HELOC) as a second mortgage would be a better play. Similar to a refinance loan, HELOCs will also require them to have a certain equity level in their home. Typically, it’s expected for a homeowner to have a minimum of 20%-25% in order to qualify.

5.  I’m happy where I am, do I really need to keep up with my home’s value? Even if your clients and prospects have no intentions to do anything mentioned above, it’s important to at least have an idea of what their home is worth. Things come up, plain and simple. Whether it’s a new addition to the family, moving because of a job in another area, or just needing a little help with their finances, homeowners need to be ready for when life throws them the proverbial curve ball.

You know the ins and outs of the real estate industry; be sure to share these tips with your clients to ensure that they do to. Check out’s Local Market Index and Rebound Reports to see how your local market is doing and if it could be a good time for any of your clients or prospects to make a move to the market. To find more home values and mortgage-related content, take a look at all the articles from’s featured writer, Shashank Shekhar.