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Ready Set Sold with Bryan Vogt #40-03: Joe Harnist: The difference between market value and replacement value in ensuring your house

March 3, 2018

Welcome back to Ready Set Sold I am your host Bryan Vogt I’m hoping you’re having a fantastic Saturday and a great weekend I know we are in the real estate business because the market is just exploding and we haven’t officially quote-unquote hit spring if you are even thinking about selling your house this is the time you may have waited for years I get it but now is the time contact your agent they should have contacted you already if not contact us contacts directly I call myself 618 210 2451.
Let’s get this house on the market and get you topped our I’ve been talking today with Joe Harnist President of Harnist Insurance Company forty years of experience you just can’t match that and that’s just not that’s not just Joe there’s other people on his team that have that years of experience and knowledge that you need to the people needed to know when they’re when you’re entering your biggest asset and that’s really important and Joe Canada follow up we were we were talking during the break there’s some other things that you wanted to bring up also about insurance and that is confusing and we hear that sometimes when buyers which when I say buyers 90 95 percent of sellers are going to become buyers.
So it’s kind of the same difference when they get their insurance and they get what market value is and we replacement value this and those are two different animals right yeah absolutely and we have that discussion pretty much daily with people because they don’t understand and we even get calls from clients that we currently write and they say well you know might my house isn’t worth this well people have to realize that insurance is based on the reconstruction cost of their home not the market value that they buy it for that they can sell it for because at the time of loss you’re going to expect the company to replace the damaged portion of the house or replace the entire house if it’s that bad of a loss so they can’t base it on the market value because they’re not going to be able to build it back for what the market value is.
And the other thing is you have to realize that it’s not only reconstruction of a house but it also includes deconstruction because they have to go in and tear out all that damaged portion of the house you know the roof that’s damaged or the room the kitchen that caught on fire all that has to be demolished and removed and hauled away and everything and that’s added expense on top of what it’s going to cost to go back in and put it all back new so there’s quite a bit of difference between market value and replacement cost so but in the long run of course that’s obstruction you have to go because insurance is look it’s something that sometimes we never want to use but we want to have it available.
And if you if you have a house and it’s under insured I’m sure that that is just full that’s just you know that that shakes people to the core so even if you’re a little bit and we’re not talking about a king’s ransom but if you’re just a little bit on the higher side I would imagine that’s a pretty good thing isn’t it yeah you know I mean we try to nail it down as close as we can you know we’ve got replacement cost worksheets that we go by and it’s based on the square footage how many stories whether there’s a basement whether it’s finished how many bathrooms are in the house you know what the size of the garage is a one car to car three car garage is there an attached deck on the back are there any open porches any specialty you know you get into higher end homes and you look at specialty rooms like wine cellars and those type of things.
Those are all factors that go into figuring that reconstruction cost and usually we’re pretty much on par with where it needs to be and we try to keep it there we don’t intentionally try to over ensure properties obviously but we you know we look at the records from the county and configure the square footage and you know the age of the house has a factor in it – whether it’s a brick or frame construction you know we look at the older bungalows you know in different places that are they’re solid masonry you know that are built back in the 40s and stuff those are kind of a different animal because those reconstruction costs can be enormous compared to what the market value is because of the fact that they’re solid masonry.
So what is the best way for people to contact you maybe you have a few different ways a very easy phone number is area code 618 233 5555 that’s two three three fifty five fifty five and our website is so was Bryan Vogt we were back after struck.

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