Understanding the Basics of Appraisals

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A home appraisal is a step of the mortgage process when an unbiased state-licensed professional determines a home’s value based on size, condition, function, and the quality of the home. To do this the appraiser must first inspect the property. Then, by researching similar homes within the area and comparing recent residential sales, the appraiser will present their “opinion of value” with all supporting data and research used to come to their conclusion.

The appraisal process is important because mortgage lenders require an appraisal before they’ll provide a home buyer a loan. This is because the value of the property will likely determine how much a lender will lend. Lenders want to make sure that homeowners aren’t over borrowing because the home serves as collateral for the mortgage. So, if the borrower were to default on the mortgage and go into foreclosure, the lender would be able to get back the money they lent by selling the house.

If you’re a buyer, a home appraisal also can function as protection for the client too. If an appraisal comes in higher than the price being paid for the residence, than the borrower will have more home equity than initially expected. Also, an appraisal can help protect a client in keeping them from overpaying for a home, if the appraisal comes in lower than the asking price.

If you’re a seller, you want your home to be appraised for the amount you’ve listed it for.  In order for that to happen there are a few things you can do to impact that number. Clean, updated, well-maintained houses tend to receive higher appraisals. Make sure things like the home’s exterior and curb appeal is one that is eye catching, holes in the drywall are patched, and rug stains are cleaned can help. It’s also a good idea to provide your appraiser with a list of recent list of improvement you’ve made to the home as well as a list of attractive aspects about your neighborhood. Be sure to mention items like grocery stores, parks, and neighboring schools.

If you are unhappy with the appraisal, sometimes there is an option to appeal called “Reconsiderations of Value.” So, if there were enhancements made your home or recent comparable residential sales that happened the neighborhood to which wasn’t considered in the initial appraisal, it’s important to provide this information to your lender. Also, getting a second appraisal is always available to the buyer as well. Lastly, it’s important to add that an appraisal that was conducted beyond six month prior will likely be considered out of date by a lender.

Nearly Half Of Seattle Homes Selling For Over Asking

Blue RidgeOnly four cities in the U.S. have a higher percentage of homes selling above their listing price than Seattle: San Francisco and San Jose, Calif. are seeing nearly 80 percent of homes selling above asking; Oakland, Calif. is not far behind at more than 70 percent; and Denver, Colo. is narrowly edging out Seattle with slightly more than 50 percent of homes going for more than list price. Seattle clocks in at just under 50 percent, according to Redfin Research. Despite home prices in Seattle being up 15 percent from this time last year, a recent report by the Puget Sound Business Journal showed that homes are not only selling for above asking, but FAR above asking. A home in Ravenna, where the buyers never personally set foot in the house before making an offer, sold for $1,175,000 – $200,000 more than its list price of $975,000. Similarly, a home in Magnolia listed for $699,000 ended up selling for $800,000. Underscoring the great lengths buyers are going to in order to purchase a home, even this home in Bellevue, which backs up to a 50-foot ravine instead of a backyard and was found to have cracks in its foundation, sold for $893,900 – 6 percent over asking.

Not only are homes selling for sky-high prices, but they’re selling in the blink of an eye. Seattle boasts the second lowest number of days on the market of any city in the U.S. at an average of nine days, according to Redfin. Only Denver is seeing its homes sell in a shorter period of time, at an average of just six days. With inventory down 27.5 percent over the year in Seattle and very high demand, it doesn’t look like this mad scramble for homes will let up in the near future.

If you have questions about buying or selling a home in Seattle, one of our agents would be happy to help you navigate this challenging market!

Seattle Homes Selling In Average of 8 Days

3804 E Blaine St.Across the U.S., houses are selling at breakneck speed, with homes only surviving on the market for an average of 28 days before being snatched up by eager buyers. Many homes sold even faster than that in May, with approximately 35 percent going into contract within two weeks of hitting the market. But you think that’s fast? The national market has nothing on Seattle, where last month homes sold after a mere 8 days on the market, and almost half sold above list price, according to Redfin. This no doubt is due to extremely low inventory, especially within the Seattle city limits, where there is less than a month’s supply of homes available, not nearly enough to satisfy the high demand for homes in the city.

Despite this increased buying activity, national home prices actually grew at a slower rate this May – up just 1.6 percent over April – compared to the 3 percent rise in prices we saw last May. On a yearly basis, prices across the country are up 6 percent from a year ago. List prices in the Seattle market increased just slightly from April to May (1.4 percent), and the median was $426,000. Year over year, Seattle prices were up 6.5 percent.

As these statistics illustrate, now is a great time to sell your home! If you’re on the fence, contact your local real estate agent to learn more about the selling process.

Home Sales And Prices Dip For Second Straight Month

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The Seattle area saw median home prices and number of home sales fall for the second consecutive month in February, according to new data from the Northwest Multiple Listing Service. The price of single-family homes in King County fell from $410,000 to $405,400 in February, and that there was little growth in the number of homes for sale. The number of pending home sales is also down about 13% from the same month last year. However, the median price of single-family homes in King County is still 11% higher than it was in February 2013.

Members of the NWMLS believe the dip in sales is not due to a shortage of buyers, but a severe shortage of housing inventory. King and Snohomish Counties both have less than a four-month supply of homes available. According to the NWMLS report, bidding wars are common in markets with less than four months of inventory. Some sellers are also delaying selling their homes because they’re underwater on their mortgages and are holding out for a continued rise in home-price appreciation. Zillow reports that one in five homes in the Seattle metro area has a mortgage with an outstanding balance higher than the home’s value.

For more information on Seattle real estate, contact your local real estate agent today.

 

 

 

 

Seattle-Area Appreciation at Highest Rate Since 2005

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Despite seeing prices for single-family homes in the Seattle area slip for the last three months of 2013, annual appreciation in December was at its highest rate since 2005, according to the S&P/Case Schiller 20-city index released on Tuesday.

Home prices in the Seattle area dropped by 0.5 percent in December (compared to 0.1 percent in November), edged out by the 20-city index, which dropped 0.1 percent in the same time period. Similarly, prices for the 20-city index rose by 13.4 percent in December, beating out the local market, where prices increased 12.4 percent.

However, gains nationally may be slowing, owing to rising home prices and mortgage rates. Although home prices increased across the 20-city index during 2013, 11 cities saw a decrease in appreciation. Some in the real estate community also believe the inclusion of the sales of bank-owned properties to third-party investors is causing reported appreciation rates to skew higher.

Why You Should Consider School Districts When Searching For a Home

Madrona Neighborhood home

As you begin your home search, there are plenty of things you already know to factor in the decision: price, neighborhood attributes,  beds and baths, square footage, and proximity to work. But have you considered looking into which school districts are round the neighborhood you’re searching? In Seattle as we know many new homeowners aren’t planning on having children anytime soon or maybe not at all, but this doesn’t mean that you should cast the school district factor aside; even if you do not have children or do not plan to, the quality of education nearby can greatly affect how much you pay for your home, and how much you can expect to sell it for in the future. You’ll pay more for your home if it is within a good school district. Parents of school age children are always searching for high school ratings, and often will pay more to live in a zoned neighborhood within a highly rated district. A good school district can also protect you from the ups and downs of the real estate market; even in an unpredictable market, a home in a great school district will likely see nearby home values staying consistent or above the median. This will protect you when it comes time for the resale, and although there are no guarantees, you can rest assured parents will always be looking to move to the best neighborhoods with the top schools. For more information on Seattle real estate, please contact your local agent today.

King County Median Home Price Falls

King County homes sales have been on the rise for the past few months, but the median price has dropped considerably, making this the third month in a row to hit the post-market boom low, according to the NWMLS. Since February 2011, home sales are up 23%, and it’s been the best month of February for sales since 2007; and it’s generally a slower month for sales.

Last month, the King County median for homes were closed at around $308, 125 according to the NWMLS, falling nearly 8% since February 2011. The median has dropped almost 36% from the record high in 2007, and we haven’t seen anything lower than the current standing since 2004. For an extensive article, please visit the Seattle Times.

Billionaire Investor Claims to be Dead Wrong on Housing Market

This past Saturday, billionaire investor Warren Buffet told the Seattle Times he was “dead wrong” in his predictions that the housing market would be in recovery by now. Buffet remains optimistic about our nation’s economic state, and wrote in his annual letter to Berkshire Hathaway shareholders that he is positive housing will recovery eventually, and help lower the nation’s unemployment. But this time around, Buffet did not offer a  prediction for when the recovery will occur.

Berkshire owns more than 80 subsidiarities, including Sees Candy & Geico Insurance, which together brought in over $513 million pre-tax profits for the company last year. However, this is far offset from the $1.8 billion those companies pulled in 2006. Berkshire took a $1.7 billion dollar loss this past year in catostrophic losses, including those from the tsunami in Japan. But several of the companies non-insurance businesses pulled in top dollars in 2011, generating relief to company investors like Buffet. Buffet has assured Berkshire shareholders that the company has a successor in mind to replace him in the future, while emphasizing he has no intentions to leave anytime soon. Berkshire has calmed concerns with succession issues by hiring two new hedge fund managers, who Buffet claims have the “brains and character to run Berkshire’s entire portfolio eventually.”

Home Sales Up From Last Year

A Seattle Times article published this week revealed that 2011 home sales are picking up in comparison to data from last year. The Northwest Multiple Listing Service released statistics on Tuesday showing a 35 percent increase in August home sales from the same time last year.  However, prices remain relatively flat with a median price $350,000.  The statistics were limited to King County.  For more information, please view the full article.

Seattle Real Estate – August 4th

Downtown SeattleSeattle Residential Real Estate:  Existing homes sale were at a 4 year high this past June, but new home homes sales were the lowest in 17 years (I am guessing a factor is less are being built).  As a combination, home sales were up 16.5% from May, but down 2.4% from last June.  To get more of the real estate numbers.

National Real Estate News:   The founder and former CEO of ForSalebyOwner.com listed his New York condominium on his own through online classified ads and for sale by owner websites, but after six months, he opted to hired a real estate agent.  The home received several offers and sold for $2.15 million: $150,000 above asking price.

Other National Real Estate News:  Pending home sales are up 2.4% in United States and 6.4% in the West.  Click link for more information.

Seattle Waterfront is Hot:  Seattle Waterfront home sales is up 12% for the first half of 2011 as compared to 2010.  Here is a blog about multiple Seattle waterfront home sales in Denny Blaine.

Seattle Office Space:  Word on the street is Facebook is looking for office space in Downtown Seattle.

Seattle Stadium News:  Will Seattle ever get a new stadium for a NHL team or an NBA team?

National Foreclosures:  Not a great news for foreclosures in the United States especially in Midwest were Bank of America is tearing down some foreclosures.