Appraisals are one of the most confusing aspects of buying or selling real estate. When a buyer and seller agree on a sales price, it can be frustrating to hear that the appraisal came in with a value too low. It’s not enough for the buyer and seller to agree to the price, the appraisal is the lender’s way to ensure they are not loaning money over the actual market value of the property.
The appraised value is reached by a licensed professional who looks at the real estate market in which the target property is located. They start with the target property and then look for recent sales in the area of comparable properties. These comparable properties will be located within a short distance of the target home. They should also be of comparable size and often fall within the same housing development.
Once these homes are identified, the appraiser will adjust for the specific differences. For instance, does the target home have an upgraded kitchen or swimming pool? They add or subtract value based on such things as location, view, lot size, upgrades, additions, condition, and many other factors. They can then arrive at a valuation for the target home.
Once the appraisal has been completed, the lender is notified of the value. At this point, the loan amount is either confirmed or declined. If the appraisal comes in too low, the buyer and seller can choose to make up the difference in the sales price, lower the sales price, or cancel the transaction.
An experienced real estate broker will help you manage the appraisal process. By learning about recent sales in your area ahead of time, you can price your home appropriately up front; then the appraisal should come back as expected.
Several things stand out when looking at market statistics for the 2nd quarter of 2019.
There are a lot more condos and single family homes for sale.
For both condos and single family homes, prices are still down from the peak of 2018.
Days on Market is down for condos and relatively stable for single family homes.
It is important to note that we hit the peak of the market in May/June 2018. We have had a market adjustment since then, primarily driven by increased inventory. However, for single family homes, we have around 2 months of inventory, meaning we are still in a market that favors the seller.
This increased inventory is great news for buyers who have more choice in finding a home. We have seen some return to multiple offers but not at the pace we saw over the past few years.
With condos, in June we had just over 3 months inventory. The condo market is being driven by more condo projects under construction and being announced, meaning that the inventory level for condos should continue to rise. The increase in the number of available condos is great for buyers and home affordability—condos usually allow for buyers to get into the market at a lower price than for single family homes. In fact, my first purchase of a residential property to live in was a condo as that was what I could afford back in 1995.
The best news for both buyers and sellers is that we’re at a 12 month low for interest rates which are under 4%.
For more information on buying or selling, please reach out to me at Jamie@JamieFlaxman.com or (206) 790-0081.
If you’re thinking of selling your home, I’ve got a class for you. I’ll be offering it twice in June.
Class description: Are you considering selling your home? If yes, this class will help you understand the current real estate market as well as learning what type of preparation is necessary and tips on downsizing. Jamie Flaxman is a real estate broker with Coldwell Banker Bain and is a Seniors Real Estate Specialist.
Tuesday, June 18 at Aegis at Callahan House in Shoreline, from 12:00-1:00, lunch included. Contact Jason Baker at (206) 452-0285 to reserve a spot or contact me at (206) 790-0081 or firstname.lastname@example.org for more information.
Do you have a group where you’d like this class presented? Let me know. Or if you’re unable to attend either of these dates but would like to learn more about the selling process, give me a call/email to discuss your needs.
In my experience I have found that most buyers are looking for a 3 or 4 bedroom home. They usually want 4 and often end up with 3. At the same time in working with sellers, I have found that a large proportion of the homes I list are 3 bedrooms. Does the number of bedrooms make a difference in the price you pay or receive?
I looked at sales of single family homes throughout the city of Seattle for the past 30 days and here’s what I found.
The 333 three-bedroom homes sold on average for $793,070 while the 192 four-bedroom homes sold for just over $1.1 million. I have to tell you while I expected there to be a difference, I did not expect to see a $300,000 difference.
For sellers, having or adding a 4th bedroom makes a huge difference. I listed a Phinney Ridge home last summer that was a 3 bedroom home. However, it had a fully finished room in the basement with large windows and heat. What it didn’t have was a closet. My clients spent a little money to create a closet, and now we had a 4 bedroom home. The room was staged as a guest room and looked great. (In most jurisdictions, the criteria to call a room a bedroom are: large window or exterior door for egress, a heat source, and a closet.)
If you’ve got a finished room that meets not all of the criteria for a bedroom, it might be worth a little money to make it a legal bedroom. Closets and heat are usually pretty easy to address. However, egress is not, so if there’s not a large window or the window is too high, this might not work for you.
For more information or to discuss the real estate market, give me a call at 206-790-0081 or email Jamie@JamieFlaxman.com.
This article comes from the materials I hand out and discuss at my “Tips for Selling Your Home Class.” If you’d like to learn more or attend a class, the next class is Friday, June 7th at the Greenwood Senior Center. Contact me for more information or to attend.
Need help with organizing and decluttering? A recommendation for a painter or a roofer? Most real estate brokers have a list of vendors who can help you with these activities. Additionally, some brokers, like myself, have taken classes in staging, and have materials that can help such as lists of places to donate or sell items. Just tell your broker what you need.
Thinking of moving to a smaller space or even a tiny home? While it is true that by liberating ourselves of extra space can open the door to lower costs (mortgage, utilities, property taxes, and repairs), for many the thought of having to downsize their belongings in order to fit in more closed-quarters is prohibitive. If you have been thinking about downsizing, here are some ways you can get the ball rolling without it seeming overwhelming:
Lifestyle Analysis – First review how your life is going to change after you downsize. If you are retiring, there may be many work-related items that no longer need to clutter your closet! Suits, jackets, shoes, purses, etc., that served you in a professional capacity may be the first to go into the donate or sell piles. If you are moving to a warmer climate, perhaps you should rethink your winter wardrobe. Moving to a condo and don’t plan on utilizing your green thumb? Consider your garden and lawn tools and supplies. Entire categories of things can be the first to go.
Space Analysis – Think about the space and functionality of the rooms you are moving to. If you don’t have a guestroom at your new place, then perhaps you don’t shouldn’t bring that entire room of items. If you are downsizing your kitchen to half of what you have now, then half of what you currently have will need to find another home. Think about your largest furniture pieces as well. Do you have room for a pool table? Also consider scale of furniture – sectionals and large dining room tables may be just too large proportionally for the rooms you will have.
Functionality Analysis – How many pans do you really cook with on a regular basis? How many mixing bowls do you really need at once? How many pairs of socks? So often we keep something around because we perceive that we need it, but you likely only use a few items in your home on a regular basis. When was the last time you made pasta from scratch or used all your towels? Downsizing means choosing, so choose wisely!
Memorabilia Analysis – This is a tough one because it means choosing among things that are cherished. Yearbooks, photos, letters, keepsakes, children’s artwork, etc., all fall into this category. As we get older, this problem becomes more pronounced as we inherit and become stewards of other people’s items. One idea is to digitize items – as files on a computer you still have the items but they take up less physical space.
This category of items is just too painful for some people to have to go through and make choices for fear of making a mistake. If this sounds like you, then perhaps your best bet is to get a storage unit and put those items in there. I do recommend that you let someone else know about the unit in the event something happens to you so that these items stay in the family.
One clue to understanding what type of real estate market we’re in is “Days on Market.” When homes are selling quickly, it tends to be a sellers’ market, and when slowing, a buyers’ market. But when we look at the numbers, it sometimes can be a confusing story.
Most of the time when we look at Days on Market, we’re using Average Days on Market. And when we do this, we see this number has increased substantially from the past few years.
This increase reflects the fact that homes that were not priced properly stayed on the market for a substantial amount of time.
However, if we look at Median Days on Market, it’s a different story. Looking for this perspective, we see that half of homes sold in a very short period whereas half sold in many more days.
What this tells us is that pricing your home properly is a critical step in getting the home sold quickly. It is imperative that you do not overprice your home, as it will sit on the market. Your real estate professional will advice you on a pricing strategy and I highly recommend that you follow that person’s advice.
For more information including a complimentary pricing analysis for your home, please reach out to me at 206-790-0081 or email Jamie@JamieFlaxman.com.
Do you feel like things are out of control? If you’ve listed your home for sale, every day might feel this way. But that’s not what we’re talking about here. The truth is there really are things sellers can’t control. But don’t worry; even though you can’t control everything, there are ways to deal with these unknowns.
Buyers – Oh if only we could control buyers. They show up at odd times, they write crazy offers, they make odd repair requests and they can be difficult. One time a deal fell through because a Feng Shui Master didn’t like the color of the kitchen.
The Market – Market forces determine so many things; interest rates and sales prices. While you can’t change these forces, you can get all the information you can so you’re prepared for how this affects the sale.
Inspectors – You’ve loved and cared for your home, but even so there could be hidden issues that only a comprehensive, professional home inspection can uncover. One way to avoid unpleasant surprises is to put a listing home warranty in place to cover unexpected repairs. Another way is to your own inspection before listing your home.
Appraisers – Appraisers are just people. On occasion they make mistakes in value. Your lender and broker will help you navigate an unfavorable appraisal. There are ways to combat a poor appraisal.
Selling your home can bring unexpected issues. If you’ve done your due diligence and hired a good broker, you’ll be able to handle the unexpected issues which are out of your control. For more information, give me a call at 206-790-0081 or email Jamie@JamieFlaxman.com.
Seattle prices continue to decline slightly for single-family homes, with a 4.6% decrease from the first quarter of 2018 to the first quarter of 2019. However, it’s important to note that we hit the peak of our market in spring 2018, so prices were near their highest point last March. Condos are where we’re seeing the biggest changes, with a significant amount of inventory on the market and a 9.6% decrease in prices. With our increased inventory we’re seeing that the number of days it’s taking a property to sell has increased substantially. But for properties priced properly, they are selling quickly, often on the first day it comes on the market and often with multiple offers. Yes, multiple offers are back, and not just 2 or 3 offers, but more than 10 on many properties.
What does this mean for you? If you’re a homeowner considering selling your property, do NOT overprice. Price is the number one determinant of buyers coming to see your home and placing offers. Overpriced homes will sit on the market. And as we’re now in spring, the busiest time of the year for our real estate market, do not wait to list your home.
Buyers, this is a great time for you. With the increase in inventory, you have many more choices. Interest rates are the lowest they’ve been in the past 12 months, so your money will go further right now. It’s definitely the time to buy.
Let’s talk about your real estate needs. Give me a call at (206) 790-0081 or email me.
Most people dread the thought of moving, yet those same people love it when they move. Why? Most likely it’s emotional attachment and nostalgia for a beloved home. It’s understandable but yet a home that just doesn’t fit your needs any longer can make even the most loved home uncomfortable. Are you wondering if it’s time to move? Here are 6 telltale signs that you should consider putting the “for sale” sign up in your front yard.
1. Your Home is Too Small – One of the most common signs is that you’ve outgrown your home.
2. Your Home is Too Large – Life changes! Empty nesters often find the home too large and it’s maintenance too much when they finally have time to travel and relax.
3. Your Home is Too Expensive – Are you spending all your extra cash making repairs or do you want major upgrades to suit your lifestyle? Are property taxes getting too high?
4. The Neighborhood is Losing Value – Neighborhoods do change over time, if yours is declining consider a move.
5. Changing the Weather – Have you finally tired of shoveling snow? A move to a warmer state could be the right move.
6. Change is Good – The last great reason to move is to try something new. Different style or location, if the home isn’t making you happy any longer, time to move.
We live in the information age; the Internet offers advice on every topic and real estate is no exception. With more and more home buyers starting their home search online, they are bombarded with advice and information – it can be easy to think that you can learn everything you need to know just by reading articles online.
The truth is your real estate agent does much more than answer your questions and open doors with a special key. A professional real estate agent will be there every step of the way. They have the experience necessary to navigate the complicated home buying process and solve common hiccups that present themselves in every real estate transactions.
Your real estate agent is a local professional. They will start by presenting themselves to the other agent as someone who will work with them to see the transaction through to a successful conclusion. They have a network of professionals who will work as a team to help you through the process. These include such professionals as: lenders, title reps, escrow officers, transaction coordinators, home inspectors, contractors, and handymen, among others.
Most importantly, your agent is your ally in the home buying process. They negotiate on your behalf – armed with experience and understanding of customary charges, costs, and terms. They will ensure that the price you pay for the home is fair for the condition and neighborhood. They will negotiate repairs, if needed and make sure you are protected with the proper contingencies.
The Internet offers lots of great information, but the most important step you can take when buying a new home is hiring a local professional real estate agent. Their knowledge and expertise can’t be found by reading an article or two online.
Contact me at Jamie@JamieFlaxman.com or 206-790-0081 to discuss how I can help you with the real estate transactions.