Over the past few months many clients have struggled with the question of

"What is the value of my home?"

WHO KNOWS??!!!

This answer is as good as any in this market considering all of the short sales, foreclosures, and distressed property sales in the market. However; before you settle on a value number for your home, make sure you ask yourself WHY you are asking this question. There are many ways to look at the so called value of your property!

Let me explain!

Are you considering selling your home?

If you are, remember that your home will typically sell for an amount that a buyer is willing to pay you for it. No matter how much we all jump up and down, no buyer in their right mind — in this market — is going to pay us what we think our home may be worth. If you are considering listing your home for sale, your best bet is to seek the advice of a professional Realtor before doing so. They can provide you with valuable information that you MUST have before deciding on the final listing price.

Are you considering refinancing? If you are, an appraisal will most likely be initiated with the transaction. The appraiser will give the lender, in the appraisal report, an opinion of what they consider to be the current market value of your home as of the date the property was inspected.

Couple of things about the appraisal:

You'll most likely NOT agree with the appraiser's value assessment. But, if the number they come up with works, and you are able to proceed with a more favorable rate and financing term, don't get too bent out of shape with the value. It's just an educated opinion.

You'll most likely NOT agree with the comparable sales that the appraiser chooses to compare values with your home. Appraisers have strict guidelines that must be followed before a comparable can be chosen. One of the most important being "recent sales in your most immediate area". With all of the short sales and foreclosures going on in many subdivisions, this guideline can be a real value killer. Once again, if the number they come up with works, and you are able to proceed with a more favorable rate and financing term, don't get too bent out of shape with the value opinion in the appraisal. It's still just an educated opinion; it's NOT what you may be able to sell your property for at some point in the near future.

Are you trying to dispute your property's tax assessor's value?

Typically, the county "Tax Assessor's Office" assigns an "Appraised Value", an "Assessed Value" and/or a "State Equalized Value" to your property. This value or number is used to calculate your annual property tax. It's not a number that should be used to list your home for sale. Nor is it a number that a lender is going to use to consider lending you money on the property. If you're looking at the tax assessor's property valuation and thinking, "Man, there is no way my home will sell for this amount", then you may want to consider filing a "valuation dispute" with the taxing authority. Be prepared to fill out the necessary paperwork and provide them with evidence to support your claim. Be prepared to stand in line along with all of the other property owners that are currently disputing their property value.

Are you trying to determine if you have enough homeowners insurance?

If this is your goal, you really need to call your insurance agent and let them help you with this. At a minimum, you want to always make sure that your home is insured for at least 100% of its estimated replacement cost.

Replacement cost is NOT:

The market value of your home.

The home's purchase price or the cost of the land.

The outstanding amount of your mortgage.

Make sure your insurance agent explains to you the difference between market value and replacement cost for insurance purposes. You don't want to find out the difference between the two when it is necessary to file a claim with your insurer.

Are you considering buying a home or making an offer on a property?

Make sure you talk to your Realtor before deciding on this number. They can tell you what similar homes are selling for in the neighborhood, how long houses are staying on the market, and tons of other important information that MUST be considered.

In conclusion, let me say that there will always be many opinions when considering what your home is truly worth. Before you can really begin your quest for your specific valuation number, it's important that you first ask yourself - WHY you're asking this question - and then seek the advice of trusted professionals in the real estate industry.

Always remember that I'm here for you so that you can make an informed home buying and/or selling choice.

Yvonne Nystrom

John L. Scott Kent North

Cell:    (253) 334-0232

Office: (253) 852-9200 x224

20632 108th Ave SE  ~  Kent, WA 98031