Bellingham/Fairhaven Real Estate

How Do You Figure Out Home Value?

Sally Farrell — Mon, 11 Jan 2010 12:12:00 GMT

Regular visitors to my site may notice that I have removed the "Home Valuation Calculator." I hesitated to add this calculator to my site in the first place, since I have not found any site that was able to consider all of the information and nuances that are required to accurately figure a value of a property. I always recommend that a seller consult and licensed real estate agent (like me) and ask them to work up a comparable market analysis (CMA), customized for their unique property.

In order to determine value, we must understand what "value" means in this context. The value I'm going to look at here is from a seller's perspective. What is a reasonable price to ask for your home in the current market? First we must gather information about the subject property, i.e. the condition, location, size, number of beds and baths, garage space, lot size and condition, etc. Then we determine which neighborhoods are similar to the subject properties neighborhood. It could be that the subject neighborhood is so unique that no other neighborhoods compare. Finally we find other homes of similar size, condition, amenities which have already SOLD. This leads me to what value means. It is one of those slippery nouns but in this application, it is the marketable price or the price agreed upon by a reasonable buyer and reasonable seller. The price or value is determined by negotiation and agreement. An active listing is not a useful comparison, because all we learn from that is what the seller wants to sell the house for. It does not give us the other part of the equation, which is what would a buyer pay for that house.

Once we gather that information we compare the "comparable properties" to the subject property and come up with a rough value. I used my own home to test some home valuation websites and found that although the ranges were fairly accurate, they were ranges with spreads of $30,000 to $70,000. Most of us could guess at such a range off the top of our heads. In addition, several of them give you, the user, comparable properties to choose from, but if you are not familiar with those properties it would be difficult to make those choices. And to be frank, as home owners, we are incredibly biased regarding our homes. We know exactly which improvements we've made, how much work we've put into our gardens and how diligent we are in our upkeep and maintenance. No other home is going to be as nice as ours!

The best way to get an estimated value on your home is to ask a licensed local real estate agent to work up an unbiased, detailed report for you. Many of us are happy to do so with no obligation. Call me!

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Homes for Sale?

Sally Farrell — Fri, 04 Dec 2009 09:41:00 GMT

If you have been searching the web for a new home and are not finding anything that floats your boat and it seems that inventory is low, don't fret, just let me know! I know of a few great properties I could share with you that are not being actively marketed right now. In addition, many property listings that were canceled around the first of December, may just be taking a break and all that's required is a friendly, well placed phone call.

The Holidays are upon us. We all need to take time to plan trips to our Grammy's or put up the tree, decorate our homes and offices, bake cookies, shop for and wrap presents, get to the post office with those packages, and send out cards to friends, family and business associates. Everyone is overwhelmed with their to-do list right now, including those who really, really want to sell their homes. It's understandable that many sellers put their marketing on hold so, they can enjoy the tree and the season without the inconvenience of keeping things pristine for potential buyers. This means many wonderful properties are taken off of the market until after the first of the year. This doesn't mean they don't want to sell, they just need a break.

So if you are looking forward to spending your holiday season house hunting, don't despair, just ask!

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Bellingham is a Hard Act to Follow

Sally Farrell — Thu, 01 Oct 2009 12:47:00 GMT

BELLINGHAM IS A HARD ACT TO FOLLOW:

I want to share an experience. Anyone who knows me personally, knows that I am a big fan of my hometown. Perhaps I need to get out more? Anyone who knows me personally, also knows that I really like being a real estate agent, despite it's strange demands on my time, it's ups and downs and built in uncertainly. But I had a day last weekend that confirmed and validated both my decision to lay down my roots here and to continue to work in this crazy business.

No, I didn't sell a house. Not even close really. I just had the pleasure and honor of taking an "out of towner" on a tour of Bellingham on a stunningly beautiful, sunny yet crisp, early fall afternoon. We met at my office and ran down the particulars. She is checking out areas in Whatcom and Skagit County, with the idea of moving from her crowded, urban, soul-less home somewhere south of here. She was not really familiar with Bellingham, and I relished the look of surprise and joy I knew I would see on her face very shortly.

We started out at my office on Meridian St. (not our City's best feature), hopped on the free-way southbound and started our tour slowly around the outskirts to get the "lay of land". Admittedly Bellingham and it's environs can be tricky to navigate, so an overview with map in hand is a must. By the time we hit Lake Whatcom she was somewhat pleased. We cruised over Alabama Hill and as we crested the hill to the dazzling view of the City and bay below, she was warming up to the idea. We cruised in and out of the Sunnyland, Lettered Streets and Columbia neighborhoods, with the sun twinkling through the changing colors and she and I both were really starting to enjoy ourselves. After a drive along Eldridge down into Downtown and past the bustle and yummy smells emanating from the Bellingham Farmers Market bellinghamfarmers.org, I think she was becoming quite enamored. Then I hit her with the drive along State Street Boulevard through South Hill and into Fairhaven. She was a goner. Me too.

I had a great time expounding and pointing out our highlights. But I do feel just a teensy bit guilty. My new friend will be visiting other small cities with other real estate agents, in her quest. But, will anyone be able to offer the same package of natural beauty, access to mountains and salt and freshwater fun, culture, cool neighborhoods, plans for the future, economic stability and general all around coolness? It's going to be a tough act to follow. Sorry, Burlington.

Check out more about my home town at these great sites: www.bellingham.org, www.fairhaven.com

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Should You Sell Now or Wait Until Next Year?

Sally Farrell — Tue, 08 Sep 2009 09:40:00 GMT

Several months back the declining prices, increasing number of foreclosures and other serious, true and depressing real estate related stories, made the news everywhere, every day. Now that things have calmed down a bit and the news has focused on other pressing issues, and my family has stop holding secret meetings behind my back, plotting to an intervention to get me into something more stable and lucrative, like busing tables or delivering phone books, I've been struck by how quickly we forget what those months taught us. As an agent who makes their living on commission alone, it's been great to get things moving again and put deals together that stick, but I'm concerned about the recent slew of people I've talked to who want to sell their homes and move on, but scoff at the prices that the real estate agents are quoting them. Including me!

Just so you know: When real estate agents come up with a list price, we compare other similar properties in the area which have sold and closed in the last six months. More than six months, does not give an accurate read of the current market. And comparing the property to homes on the market which have not yet sold is pointless except to see what your competition is going to be. A homes value cannot be truly determined until a willing buyer and a willing seller have come to an agreement on a price. That price is only known after the property has been fully negotiated and the money and property has changed hands.

It seems that as soon as the market started to "recover" a bit, our mindset goes straight back to the good old days of 10+% yearly increase in property values. In those times gone by, the simple cure for a home price you don't quite like -, just give it a year! Sellers who want to "give it until the market turns around" to put their homes on the market have every right to do so, of course, by all means! I'll be here next year! If you don't have to sell and you're current home is comfortable, in a decent location and it's not putting you out financially, take the gamble.

But, what if you need to relocate, down-size either cost-wise or size-wise, or up-size due to a growing family? No one knows what the market will do in the next year, but we know what it will not do. Real estate in Whatcom County, it will not grow at a rate higher than 1-2%. There are some very likely nots as well. Interest rates will very likely not be lower than they are now (a buyer client of mine just locked in at 4.85%) and the $8,000 tax credit to first time home buyers will very likely not be available next Spring. These are just a few of the obvious factors that a seller should consider, when they consider holding off for better days. What if the property your thinking of selling is vacant? If we're lucky enough to have a full 2% increase in prices in the next six months (that would be so great!) a 2% increase on a $300,000 is a decent $6,000. But how much does that empty property set you back every month in mortgage payments, insurance, taxes and upkeep? Is that $6,000 going to cover those expenses?

We real estate agents understand that your home is unique, you've put a lot of money and effort into it and that you have a strong emotional attachment to it. We understand you don't want to give it away. (If you do want to give it away, please call me immediately) But, your home is also a huge investment which if handled correctly now will continue to serve you in the future.

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What To Do First (After You Call Me)

Sally Farrell — Thu, 27 Aug 2009 11:37:00 GMT

Did you know that "May you live in interesting times," is not an ancient Chinese blessing, but a vicious, ancient Chinese curse? Or, so I read once, many years ago and have adopted as a fact I like to share. But no matter, even if it was not ever a real curse, based upon this past "interesting year," I think it works. The media just keeps coming at us with sad news of more lay offs, car dealerships closing and mounting foreclosures. But, we have also been buoyed with news of low interest rates, tax incentives and real estate market upswings. Interesting indeed. If you are one of the intelligent, and prudent individuals who have decided that it's a good time to participate in the real estate market, I have some advice in order to be better prepared to take on any challenges.

My advice, whether you are buying a home for the first time (especially if you are buying a home for the first time) or if you are selling a home and moving up down or sideways, is to call me of course! But, after we have a nice chat in my office or meet over coffee, the first thing I am going to tell you to do is to call on a local, trusted, mortgage lender and review your situation and get yourself a pre-approval letter. before you step foot one, into an open house or ask me to open a house for you. You may wonder why that is so important. Why am I trying to take all of the fun out of this? You know what you can afford! Maybe, but not necessarily. We live in "interesting times" chiefly due to problems with banks and bad real estate loans coming back to roost right? Some banks have gone under, others sold, others took huge infusions of cash from the government. Those banks are now holding on very, very tightly to their dough. What was possible last summer or fall may not be possible this summer. On the other hand, the good news is there are incentive programs that only qualified lenders can offer.

The sad fact is, I have seen several wonderful, clients fall by the wayside because they lept into the fun and exciting process of getting on-line and looking at houses they loved and calling me with their list or asking me to compile a list. We would go out and get all excited about a super deal, an awesome kitchen, fenced backyard, and a home they could spend many happy years in. All the while I query, "Have you talked to the bank yet?" So rude of me. But, when they find something they just have to have and want me to write an offer, and they can no longer avoid the inevitable, they find to their shock and horror that something in their portfolio is insufficient and they are DENIED.

However, if you go to an experienced lender, backed by a solid institution, that lender may be able to help you find the glitch in your balance sheet and advise you on how to make the changes necessary to qualify. Lenders are nice people, I promise they really want to help. If you do let them help, when it comes time to go out and look at shiny new homes, or rose covered cottages or sweeping view condos, we can do so with confidence. With pre-approval letter in hand, we can write up an offer at the drop of a hat. Sure, having control like that removes an element of mystery that may make home buying more "interesting." But I've had enough "interesting" to last me for a while. How about you?

Call me,360-393-7339, e-mail me @ farrellhomes@comcast.net or tweet me, @farrellhomes,. and I can set you up with a local lender who matches up with your situation. They're ready to help and so am I.

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Buy Real Estate and Make a BIG Impact

Sally Farrell — Thu, 27 Aug 2009 11:36:00 GMT

Are you wondering why investors and other savvy buyers are taking advantage of this market? It's Summertime, 2009 and Bellingham and Whatcom County prices have stabilized, interest rates are low and there are great programs out there to assist with down payments. If you are still sitting on the fence waiting for a good reason to buy, how about this one? The purchase of a home has a huge beneficial impact on the local economy. Let's face it, every local economy can use more tax revenue, jobs and general infusions of cash. The purchase of a home impacts all three and if you keep your choice of services focused on locally owned business, the impact is even greater. You can make a difference, and it's as easy as falling off a log (or hopping off a fence.)

According to the National Association of Realtors, the average home sale generates, $62,000 in additional economic activity for every house sold. Every home sale triggers other purchases and payments. Furnishings, appliances, remodeling and repairs and moving expenses, are expenses that are incurred on both the buying and selling side of the transaction. Other payments and fees include the necessary inspections, escrow and title services, County excise taxes, loan fees, etc. all contribute positively into the local coffers.

$62,000 may seem like a lot, so let's look at a Real Estate Transaction here in Whatcom County. Althought it varies greatly from Bellingham, to Lynden to Ferndal, as of the end of June the median price for a home sold in Whatcom County, to date, was $265,000. Out of that came commissions, which are further injected into the local economy by the activity of each agent, closing costs, which include loan, escrow and title fees as well as the excise tax, etc.

OUT OF $265,000

Commissions: $15,900

Buyers closing costs $6,000

Sellers closing costs $6,000

Furnishing/Appliances $5,000

Remodel/Repairs $10,000

Inspections $1,000

Total $43,900

So you can see that even with this modest home sale and conservative numbers assigned to our remodeling and furnishing budget, this sale had a BIG impact. Keeping that money close to home by utilizing locally owned business (like Coldwell Banker Miller-Arnason of course!) can make really make a difference in keeping the money in our community, which means more jobs, which means more goods sold, and on and on.

Thanks for indulging me. Give me a call if you have any questions about this blog or with any real estate question you may have.

Sally Farrell

393-7339

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TWEET ME, FRIEND ME, FOLLOW ME

Sally Farrell — Sat, 01 Aug 2009 09:35:00 GMT

Today I am swapping out this blurb which graced my home page for my recent blog. The Bellingham Real Estate Market is improving and things are looking up. I am doing my best to spread the news, utilizing, my web page, Google, Craigslist, Biznik, Linkedin, Twitter and Facebook, to name a few.

I have been really excited to learn about the power of social networking recently. Getting to know potential business connections in a non-committal, safe environment prior to engaging them professionally seems like such a great way to do business. It's also a fantastic medium to spread the word about your business or product because the people that are spreading the word are doing it because they are genuinely interested, either in you, your product or having you reciprocate by promoting their business or product. It is a beautiful system that thrives on reciprocity and integrity.

It's not all business though. You can learn a lot of fun things about people and hear about events that are taking place in your community you might otherwise never have been exposed to.

Please tweet me, http://www.twitter.com, friend me, http://www.facebook.com, connect with me on http://www.linkedin.com (connect with over 40 million professionals) join me http://www.biznik.com (business networking that doesn't suck). You can hear about what I'm up to every day, ask me questions, tell me what you're up to or just wait for notification of great deals or events that are taking place.

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What if You're Not a First Time Home Buyer?

Sally Farrell — Wed, 20 May 2009 15:29:00 GMT

You've heard a lot of bad news, you've heard a lot of "It's A Great Time to Buy" from lenders and real estate agents and that lady on TV from the National Association of Realtors. But is it? What if you're not an anointed "FIRST TIME HOME BUYER" who is blessed with the $8,000 tax credit? What if your a regular schmo, with a house to sell before you can buy a new one, and what if your house is now worth less than it was last year?. You missed the boat and now you might have to sell the boat to keep your boat afloat, right?

Let's just see about that. What if you live in a real estate market like the one I live in? Depending on who you ask and the exact data that is crunched, the median home prices here in Whatcom County have declined over the past year. And depending on where you live in this county of diverse landscapes, climates and cultures, that decline could range from a mere 3% to over 30%. But for ease of math, lets say it's 10%. If you sell your home this year you'll probably get 10% less than you could have gotten for it last year. Oh, that's not good, you feel ripped off could just kick yourself for not doing this sooner. Why didn't you sell last year or the year before when the market was hot?

The fact is, if you've owned your home for several years, the value of your home is really sort of imaginary until a buyer plops down some money for it. And besides, life doesn't work that way. People need to sell their homes for many reasons that have nothing to do with "the market," like growing families or growing stacks of stuff or to move closer to their jobs. Or maybe want something nicer, because you've worked hard and you deserve it!

So, you put your home that was worth $300,000 last year, up for sale. Chances are that now it's going to fetch $270,000. You feel you've lost that imaginary $30,000, and that hurts. I feel for you. But lets say you want to buy a bigger, nicer house in your ideal location. That house that would have been valued at $400,000 last year, most likely dropped $40,000. Now I'm happy for you!

Do you see where I'm going with this? You "lost" $30,000 on your sale But you pay $40,000 less for the new house, giving you a net gain of $10,000. Plus if you did all of this last year, you would have likely locked in at 5.5% and felt like a real winner. But this Spring/Summer, it may be possible to lock in under 5%. Don't make me do the math, trust me - under 5% is good.

So this is not earth shaking news, but I think it's worth repeating worth thinking about and worth sharing. So you're not a first time home buyer? This market still has some very nice perks to offer.

Have a great Memorial Day Weekend. Call me if you have any questions!

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