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Summary: “How much is my Seattle home worth?” This is a common question among homeowners who are thinking about selling or refinancing in the near future. This article explains the different ways to measure a home’s value, and how they relate to the selling or refinancing process.
If you are contemplating selling your Seattle home some time soon, then you will certainly want to know what the value of your home is. This will tell you roughly what you can expect to get for your home, which can definitely come in useful if you plan to buy a subsequent home.
The first thing to understand is that there are different types of home values, and they don’t always align perfectly. In fact, they can differ by a wide margin.
You’ve probably seen this number in letters sent from your local tax assessor’s office, or taxation board. If your home is located in Seattle, you’ll receive this kind of correspondence from the King County Assessor’s office. The assessed value of a house is determined by local tax officials and is usually computed based on a standard formula.
“Each year, our accredited appraisers assess your property at its full market value using one or all of three approaches: Market (comparable sales), Cost (reproduction or replacement cost, less depreciation) or Income (income or capitalization of economic rents).”
They also state that they value homes in Seattle, and across the county, based on 100% of “true and fair” market value.
Taxation is the sole purpose of the assessed value. This figure is used to determine the amount of property tax charged for homes in Seattle. In Washington State, property taxes can be used to cover a variety of government expenses, including schools, police and fire services, sewage, infrastructure and more.
The fair market value (FMV) is just what it sounds like. It’s a fair price for a particular Seattle home based on current real estate market conditions. This value is influenced by housing supply and demand, and by recent comparable sales or “comps.” But individual opinions and interpretations play a role as well.
Fair market value is particularly important when selling a home in Seattle, because it partly determines how long it takes to sell the house. When a property is priced at or near FMV, it will usually sell in a reasonable amount of time. When priced much higher than FMV, that same property will take longer to sell.
You can determine the fair market value of a house by seeing what similar homes have sold for recently, in the same area where your house is located. Real estate agents specialize in identifying and evaluating these “comparable sales.”
Here’s what you should know as a Seattle homeowner. The assessed value of your home might be less than the current market value. This is common. That’s because house prices change constantly, but tax assessors usually only update their values annually.
So, if you’re planning to sell your home in Seattle, the assessed value might not be very useful when it comes to setting your asking price. You’d be better off using comparable sales data to determine a reasonable asking price, based on true market conditions.
If your goal is to refinance your Seattle home, you’ll encounter yet another type of property value. And that’s the one determined by a licensed home appraiser. So let’s talk about that next.
Related: Seattle home price trends in 2016
The appraised value of a house is the result of a home appraisal, which is conducted by a licensed real estate appraiser. The appraisal is an evaluation of a specific property in comparison to other properties that have sold recently. It can be used to determine the market value of a house for refinancing purposes, among other reasons.
In some ways, the appraised value (determined by a licensed home appraiser) is similar to the fair market value mentioned earlier. The distinction is that the appraisal is one person’s opinion, while the fair market value can be determined by anyone who evaluates local real estate conditions, such as an agent.
Mortgage lenders almost always have homes professionally appraised in refinancing scenarios. According to John Bredemeyer of the Appraisal Institute, “the goal of an appraiser is also to estimate the true market value of a property, so that the lender can make an informed decision when providing a loan.”
Where you look for valuation information will depend on your goals. If you’re planning to sell your Seattle home — and you want to sell it as quickly as possible — you should look to the local real estate market. Specifically, you’ll want to look at recent sales prices for similar homes in the same area. This will help you determine a reasonable asking price based on current market conditions in Seattle.
If you’re planning to refinance your home, your mortgage lender will likely have it appraised by a professional appraiser. This is the value that matters most when refinancing, because it can determine whether or not you’re able to get a loan.
Sammamish Mortgage offers a free service for homeowners who want to know what their homes are worth in the current market. Through this service, you can get an estimate of your property value along with comparable sales data from the neighborhood.
Will you need mortgage financing to buy a home in Seattle? We can help. Sammamish Mortgage has been serving buyers across the Pacific Northwest for about 28 years. We offer a wide variety of mortgage programs with flexible qualification criteria in Washington, Colorado, Idaho, and Oregon. Please contact us today with any financing-related questions you have.
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