home insurance value

Q. I recently had an estate agent round to value my house and there is a big difference between what the agent says my house is worth and the amount I have it insured for. Should I increase my insured value?

 A. The market value of a home and its value for insurance purposes are two very different things. The estate agents’ figure indicates what your home is worth should you sell it, while the insured value is solely concerned with the cost of rebuilding it in the event of something like a major fire. The rebuild figure is almost always lower, mainly because it doesn’t take into account the value of the land on which the property sits. So, there shouldn’t be a cause for concern. 

However, whether the insured value is actually correct is another matter altogether... 

Generally speaking, insurance companies increase their valuations annually in line with inflation. However, this doesn’t necessarily mean that the figure is accurate; you may have significantly extended or improved your home over the years and unless you make a point of telling your insurers, they won’t have taken that into account. 

As a general rule, I would advise you to check the insured value of your home every two or three years. It’s calculated by multiplying the property’s total external size (both upstairs and downstairs) by the estimated rebuilding cost per square foot or square metre, which can vary quite considerably depending on where you live and the type of property you live in - these costs are published by the Royal Institute of Chartered Surveyors and are available, at a price, from most qualified surveyors. Alternatively, the website of the Association of British Insurers’ includes a free building insurance calculator. 

Once you’ve done your calculations, you can easily compare the result with the insurer’s valuation and if you’re not happy, ask them to change it.

A useful infographic explaining the planning permission process.

Well, it’s not absolutely necessary but it would be sensible to do so.

 

If you are relatively young, the whole subject of making a will may sound a bit morbid – not to say premature! Nevertheless, you have just made probably the biggest joint investment in your lives, so you want to be sure that both your interests are equally protected.

 

For the sake of argument, I’m assuming that you did buy it jointly, and that it is in both your names. However, there are actually two different types of joint ownership – and you need to check.

 

If you own the property as ‘Joint Tenants’ – in other words, what most people actually think of as joint owners - then each of you should automatically become the sole owner of the entire property if the other dies, irrespective of whether you are married or not.

 

If however, you own the property as ‘Tenants in Common’, the surviving partner has no automatic right of inheritance and the deceased’s share becomes part of his or her estate to be distributed, in the absence of a will, according to the rules of intestacy - which in practice means that it goes to any living relatives in a strictly laid-down order of precedence, or even reverts to the Crown.

 

Of course, if you are married or in a civil partnership, then that’s not a problem, since the spouse automatically comes top of the list. But if you’re not, and therefore from a legal standpoint you are only co-habiting, then the only recourse open to the surviving co-owner would be to buy out the deceased’s share.

 

Either way, to be on the safe side, I would advise making two so-called ‘mirror’ wills, which basically match and reflect each other so that in the event that either party dies, the survivor is equally protected. A bit morbid perhaps, but it’s better to be safe than sorry.

This is one of the things often used as an example of how unprofessional estate agents can sometimes be. However, your agent is actually legally obliged to pass on all formal offers right up until contracts are exchanged, which is of course when the agreement becomes legally binding. Up to that point, your buyer is entitled to change their offer at any time – and by the same token, you are equally free to accept another offer. 

Now, this might make sense in the case of higher offers, but why pass on lower offers? Well, in certain circumstances, a slightly lower offer may actually be in your best interests. For example, if you absolutely must move by a certain date and you’ve already accepted an offer but your buyer is trapped in a slow-moving chain, a marginally lower offer from, say, a cash buyer – someone who can effectively guarantee completion within your timeframe – may well be worth considering. 

Practical and legal points aside, there is, of course, a moral argument to this rule – moving home is a big event in anyone’s life and once an agreement is made, most ideally wouldn’t want to renege on the deal and let the other party down. If you really are set on accepting a particular offer, irrespective of any others that might materialise, then you can always absolve your agent of his legal duty by confirming your wishes in writing. 

At the end of the day, everyone’s situation is different and you have to do what’s right for you; if it meant your family was going to be homeless then you would have to do the right thing for your family, even if it did mean breaking a chain or letting others down. Given the choice, I’m sure we’d all opt for the more morally ‘right’ option if we could.

 

Your estate agent will advertise your house, make sure that the details are seen by potential buyers and arrange and attend viewing appointments but yes, there are actually a few things you can do to help the process to a speedy completion with minimal stress. 

  • Presentation for viewings
    • Generally speaking, a well-presented house smells fresh and is clean and tidy with worktops free of washing up, etc. Your agent may advise you on specific points to take it a little further – perhaps with a bit of de-cluttering or a little redecoration. It is of course up to you to put this advice into action but be aware, it can have a significant impact upon the final price you achieve for your home.
  • Leave viewings to the agents
    • Try to be out when viewings take place. It may well be useful for prospective purchasers to know how easy the neighbours are to get along with but owners also tend to point out things they would change if they were to stay, which can then come across as negative however unintended or well-meant. Your agent can answer most questions and if they can't, will simply ask you and let the viewers know.
  • Instruct a solicitor/conveyancer as soon as possible
    • This way, any pre-sale paperwork can be done in preparation so once a buyer is found it’ll be all systems go for the quickest possible transaction timescale. The Experts in Property network offer local and fixed fee, no sale-no fee conveyancing services so if the property doesn’t sell after all, there is no fee to pay.
  • Get your documents ready
    • In order for your solicitor/conveyancer to take action, they’ll need some documents from you so dig out and gather together information such as proof of identities, guarantees and details of work carried out at the property, paperwork on issues such as subsidence and additional insurances, etc. The earlier your legal representative has these, the earlier they can start to prepare the necessary legal documents for a sale.
  • In addition, put time aside to read and respond quickly to requests from lenders, legal companies and estate agents, to help things move swiftly towards completion
  • Get quotes from removal companies early on
    • The last thing you want when selling your home is to have to rush around at the last minute to find a removal company, only to find that you’ve been charged over the odds.

We have produced a series of quick tips for you to learn more about this very topic.

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