Am I Under Valuing?

Every few months, I like to click over to Kelley Blue Book to check out the value of my car. Not that it’s any big deal; I don’t plan on selling it for another 10-15 years, and the value will be vastly different by then. But I choose to value my car as part of my net worth. Partly because, if something were to go horribly wrong, the car is an asset that I could sell. Secondly, it is something that I currently have a loan on. My accounting background tells me to balance liabilities against assets.

Regardless, I like to keep tabs on the value of my car. And, since it is a depreciating asset, I need to update the value on a semi regular basis. It was easy when I owned the Nissan, and also with the Honda; they were both at least a couple of years old, so their values were easy to look up. A 2014 Ford Escape? Not so much. Up until recently, Kelley Blue Book didn’t even list my vehicle. And why would they? If you were buying one, you’d likely be buying it new, not used!

We all know that cars depreciate in value the moment you drive them off the lot. But by how much? It’s not as though there’s a set, across the board %. It varies, depending on the type of car, the popularity, the market. Without much else to go on, I decided to use the 2013 Ford Escape as a base. At the time I bought the new vehicle, the 2013’s were selling for around $18,000. A base model 2014 had an MSRP of $22,700. I arbitrarily decided to add $1,000 to the 2013 value, and use $19,000 for my estimate.

I looked today, and found that the 2014 Ford Escape is officially listed on Kelley Blue Book. So, how’d I do with valuing my vehicle? The website claims that if I were to sell my Escape to a private individual, I could expect to get $20,000+. There is no info yet on dealer trade values, but that number would likely be $1,000-2,000 lower, at least. All in all, I don’t think I’m too far off. Honestly, the number isn’t that important right now. It will really only matter when I go to sell it, which isn’t going to be for a while anyways.

Which brings me to my house. I’ve been valuing my house at $45,000 for net worth purposes. Some people have questioned if that number might be too low. When I first valued it, I didn’t think so. But, honestly, I was valuing it more out of fear than anything else. According to Zillow, my house’s current value is $74,000.  Chase has a home value estimator that generally agrees with that number; It currently lists my value at $73,000. Personally, I think these values are too high. How much too high? Well, that I don’t know.

Since I’m getting ready to put the house on the market, I prefer to err on the side of caution. What do I mean? Well, let’s say I sell the house for what I paid, $54,900. As the seller, I’d owe 6-7% of that amount in Realtor’s fees ($3,294-3,843). Plus, I’d likely be footing the closing costs ($2,000-3,000). Those two things alone bring it down to $48,057-49,606. That’s assuming the buyer didn’t ask for any additional repairs, etc. Given that my mortgage is currently sitting just over $49,000 I’d have to cough up some cash to close the sale.

Do I think my house is only worth what I paid for it? That’s a good question! I bought the house right before the market crashed. Luckily, my area of the Midwest wasn’t too overpriced, so the drops weren’t as drastic as other parts of the country. There were a lot of foreclosures in my area, which would bring the value down. But, for the most part, things seem to be stabilizing. I’ve done a lot of repairs and remodeling since buying the house. But it is only a 1 bedroom house. There isn’t a huge market for 1 bedroom houses. And the fact that it’s 1 bedroom, on a larger plot of land, makes it an even smaller market.

Basically, I have no idea how to value my house. Which is why I plan to rely on an experienced Realtor. There are a lot of things I’ll do myself. Trying to sell my house? I’m just not comfortable with that. Everyone should know their personal limits and skills. I’d rather pay someone to sell the home more quickly, and at a fair price.

So, my values are skewed. I accept that. After all, the true value is what someone is willing to pay for it. Until that day comes, it’s all just educated guesses.

– Cindy W.


  1. A car is only worth what someone will pay for it on the day you sell it. Most people over value both their car and their home in their net worth.

    I do not include my car in my net worth. It is a constantly depreciating thing that I need to get back and forth from work. If I lived in a larger city with great public transportation I would put a very conservative estimate on my car because I could sell it and still get around.

    1. I completely agree Jane!

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