Tuesday, August 16, 2022
Chuck Marunde, J.D., Broker/Owner 360-775-5424


iRealty Virtual Brokers


Broker/Consultant

Washington State

SUBSCRIBE
  • Home
  • Search MLS
    • Sequim MLS
    • Sequim MLS Map Search
    • Port Angeles MLS
    • Port Townsend MLS
    • San Juan Islands MLS
    • All Islands MLS
    • How to Search the Sequim MLS
  • Videos
    • Sequim Videos Q&A
    • Buyer Videos Part 1
    • Buyer Videos Part 2
    • Buyer Videos Part 3
    • Buyer Videos Part 4
    • Living in Sequim Video Channel
  • Books
    The Coming Real Estate Crash

    The Coming Real Estate Crash

    The Sequim Real Estate Trilogy

    The Sequim Real Estate Trilogy

    Sequim Real Estate Videos for Buyers: The Ultimate Video Guide for Sequim Washington

    Sequim Real Estate Videos for Buyers: The Ultimate Video Guide for Sequim Washington

    Escaping California to the San Juan Islands

    Escaping California to the San Juan Islands

    Get Healthy

    Get Healthy: Increase Natural Immunities, Cellular Energy, Deep Sleep & Decrease Blood Pressure

    Manage Your Energy

    Manage Your Energy Not Your Time

    Real Estate Brokerage From Bricks and Mortar to High Tech Virtuality

    Real Estate Brokerage From Bricks and Mortar to High Tech Virtuality

    7 Myths of Selling Your Home

    7 Myths of Selling Your Home

    Buying Your Retirement Home

    Buying Your Retirement Home

    The New World of Marketing for Real Estate Agents

    The New World of Marketing for Real Estate Agents

    Sequim Real Estate For Buyers: Free eBook Updates Forever

    Sequim Real Estate For Buyers: Free eBook Updates Forever

    24 Secrets of Buying a Country Home

    24 Secrets of Buying a Country Home

    Sequim Real Estate: A Buyer’s Guide

    Sequim Real Estate: A Buyer’s Guide

    Living Off The Grid iin Alaska

    Living Off The Grid in Alaska

    Buying and Selling Real Estate

    Buying and Selling Real Estate

    Trending Tags

      • Sequim Real Estate for Buyers (Free eBook Updates Forever)
      • Sequim Real Estate: A Buyer’s Guide (Paperback)
      • Escaping California to The San Juan Islands
      • Buying & Selling Real Estate in The Rain Shadow
      • Real Estate From Bricks & Mortar to High Tech Virtuality
      • The Seven Myths of Selling Your Home
      • Buying Your Retirement Home
      • The New World of Marketing for Real Estate Agents
    • Agents
      • Professional Buyer’s Agent
      • Flat Fee Listing Broker
    Tetralogy
    No Result
    View All Result
    • Login
    • Register
    • Home
    • Search MLS
      • Sequim MLS
      • Sequim MLS Map Search
      • Port Angeles MLS
      • Port Townsend MLS
      • San Juan Islands MLS
      • All Islands MLS
      • How to Search the Sequim MLS
    • Videos
      • Sequim Videos Q&A
      • Buyer Videos Part 1
      • Buyer Videos Part 2
      • Buyer Videos Part 3
      • Buyer Videos Part 4
      • Living in Sequim Video Channel
    • Books
      The Coming Real Estate Crash

      The Coming Real Estate Crash

      The Sequim Real Estate Trilogy

      The Sequim Real Estate Trilogy

      Sequim Real Estate Videos for Buyers: The Ultimate Video Guide for Sequim Washington

      Sequim Real Estate Videos for Buyers: The Ultimate Video Guide for Sequim Washington

      Escaping California to the San Juan Islands

      Escaping California to the San Juan Islands

      Get Healthy

      Get Healthy: Increase Natural Immunities, Cellular Energy, Deep Sleep & Decrease Blood Pressure

      Manage Your Energy

      Manage Your Energy Not Your Time

      Real Estate Brokerage From Bricks and Mortar to High Tech Virtuality

      Real Estate Brokerage From Bricks and Mortar to High Tech Virtuality

      7 Myths of Selling Your Home

      7 Myths of Selling Your Home

      Buying Your Retirement Home

      Buying Your Retirement Home

      The New World of Marketing for Real Estate Agents

      The New World of Marketing for Real Estate Agents

      Sequim Real Estate For Buyers: Free eBook Updates Forever

      Sequim Real Estate For Buyers: Free eBook Updates Forever

      24 Secrets of Buying a Country Home

      24 Secrets of Buying a Country Home

      Sequim Real Estate: A Buyer’s Guide

      Sequim Real Estate: A Buyer’s Guide

      Living Off The Grid iin Alaska

      Living Off The Grid in Alaska

      Buying and Selling Real Estate

      Buying and Selling Real Estate

      Trending Tags

        • Sequim Real Estate for Buyers (Free eBook Updates Forever)
        • Sequim Real Estate: A Buyer’s Guide (Paperback)
        • Escaping California to The San Juan Islands
        • Buying & Selling Real Estate in The Rain Shadow
        • Real Estate From Bricks & Mortar to High Tech Virtuality
        • The Seven Myths of Selling Your Home
        • Buying Your Retirement Home
        • The New World of Marketing for Real Estate Agents
      • Agents
        • Professional Buyer’s Agent
        • Flat Fee Listing Broker
      No Result
      View All Result
      iRealty Virtual Brokers
      No Result
      View All Result
      Home Sequim

      What is The Value of a Home

      Chuck Marunde by Chuck Marunde
      September 20, 2019
      Reading Time: 4 mins read
      0 0
      0

      There is a way to calculate the value of a home, aka the fair market value (FMV). If you know the FMV, you have very valuable information when it comes to making an offer. There are several methods to determine the value of a home. 

      Value of a Home

      The replacement cost approach is where I start, because it is always interesting to know what it would cost to build a similar home on a similar lot. If you can buy the lot and build a home cheaper than you can buy an existing home, you will probably choose to build. Of course, in a recession the replacement cost will be much higher than buying the same or similar home (20% to 30% in this market).

      The Value of a Home

      In a weak market, if I’m showing a home to buyers, and I calculate the replacement cost at $400,000, if the home is currently listed at $345,000, I can have confidence my buyers are not going to pay more than the true value of the home based on replacement cost. We still have to look at comps, of course, but the greatest fear most retirees have today when they buy their home is the fear of overpaying. 

      The Tax Assessor’s value is also a good way to check or affirm what the comps are telling us. The tax assessment is supposed to represent the real value of a home, but the assessment could be high or low, and by a significant margin. The assessor’s software program that collects and compares properties is all good information, but it can be behind the market by a period of months or even years in some cases. And sometimes the assessor’s value is exactly right.

      The comparative market analysis using sales comps is clearly the best method to arrive at the true value of a home. It is the method banks and mortgage companies use when they decide whether or not to make a loan and use the house as security. The trick with using comps is that they must be good comps. In other words, the comps must be homes that are truly similar and in similar neighborhoods. Homes that make the best comps are similar in architectural style, built around the same time period, have similar construction materials and equal labor quality, have similar views, have similar acreage and privacy, have similar utilities, and are about the same distance from shopping and schools.

      In a major metropolitan area or a large rural subdivision, you will have the best chance of finding comps that are truly similar, but in a rural area or in a small market in the country, such as Sequim, Washington, many of the closest comps are not very similar. 

      Expertise on the Value of a Home

      The expertise of the person (appraiser, real estate agent) who does the comp analysis becomes extremely important. An inexperienced agent who slaps together a comp report using dissimilar homes will arrive at a FMV, but it will be low or high, and maybe by a lot. This is a case where experience is everything.

      Now we finally get to what I am calling the “supply and demand factor.” This is my subjective approach to arriving at true FMV. I don’t use this approach by itself. It is the last method I apply when examining value.

      After working with hundreds of buyers over three decades, I’ve learned how my buyers think, what their preferences are, what they don’t like, and what they are willing to compromise on. I have seen how certain features affect them as they walk into a home and what outdoor features impress them. I have assimilated my buyers’ feelings and impressions of value. This is how I can walk into a home today, and have a gut feeling for what the FMV is to a buyer in today’s market.

      In economics this interaction between buyers and sellers is called supply and demand, and it determines the value of a home. As I look through my clients’ eyes, and as I consider what has sold that is similar, I have a gut feeling for what I think FMV is. If my gut feeling sends me warning signals about the price, we go back to the drawing board to examine value. While all of this is admittedly subjective, it is no less valuable for buyers when it comes to making an offer that is reasonable. By going through each of these analyses, you really can capture a fairly reliable estimate of the true fair market value of a home.

       

      Last Updated on September 20, 2019 by Chuck Marunde

      ShareTweet
      Chuck Marunde

      Chuck Marunde

      Chuck grew up in remote Alaska, graduated from the University of Alaska with a degree in Economics and Teacher Certification, and after teaching high school for two years, went to law school at Gonzaga University in Spokane, Washington. He served four years as a Captain and JAG in the USAF at Nellis AFB in Las Vegas. After practicing real estate law for 20 years in Washington, Chuck founded iRealty Virtual Brokers covering Sequim and the beautiful Olympic Peninsula. He is the author of 2,200 real estate articles and a dozen real estate books, and he produced over 100 real estate videos. Chuck combined his love for real estate and technology to create a massive Internet presence, and his articles and videos and books have been viewed by millions. Chuck is a well recognized real estate expert and his counsel is sought by other brokers and practicing attorneys around the country. Buyers from New York to Hawaii and from Florida to Alaska seek him out to retain him as their buyer's agent, and home owners around the State of Washington seek him out because of his new Flat Fee Listing Service. 

      Related Posts

      10 Reasons
      Retire in Sequim

      10 Reasons Not to Move to Sequim

      November 30, 2020
      45
      Best MLS in WA
      Retire in Sequim

      Top 10 Reasons To Retire in Sequim WA

      September 11, 2020
      15
      top 10 reasons
      Retire in Sequim

      Top 10 Reasons to Retire in Sequim WA

      July 31, 2020
      7
      Covid-19
      Sequim

      What Does Covid-19 Rules Require for Viewing Homes in Washington?

      July 7, 2020
      3
      Crazy World
      Sequim

      It’s a Crazy Crazy World Out There

      May 24, 2020
      3
      Sequim

      Sequim WA During the Covid-19 Vacation

      April 28, 2020
      3
      Next Post

      Florida to Sequim

      Real Estate Bankruptcy

      Leave a Reply Cancel reply

      Your email address will not be published. Required fields are marked *

      I agree to the Terms & Conditions and Privacy Policy.

      This site uses Akismet to reduce spam. Learn how your comment data is processed.

      "I wish I read this before selling my
      home. I could have saved $50,000." Andy 

      Search 2,200 Articles by Category

      • Trending
      • Comments
      • Latest
      Buyer and Seller

      What if a Buyer and Seller Talk to Each Other?

      August 5, 2022
      10 Best Places to Retire

      Why is Sequim One Of The 10 Best Places To Retire?

      September 22, 2019
      Terminate a real estate contract

      How to Terminate a Real Estate Contract

      December 31, 2020
      Prorate Propane

      How to Prorate Propane at Closing

      August 15, 2015
      print newspapers

      Print Newspapers Losing Readers to the Internet

      42
      FNMA Killing Transactions by Requiring Private Road Maintenance Agreements

      FNMA Killing Transactions by Requiring Private Road Maintenance Agreements

      31
      Buyer and Seller

      What if a Buyer and Seller Talk to Each Other?

      28

      What Documents Does a Buyer Need to Buy Real Estate?

      24
      Marunde-Books

      Marunde Books: I’m Having Far Too Much Fun Here

      August 15, 2022
      Financing Contingency

      What does “The Financing Contingency Shall Survive the Closing Date” Mean?

      August 12, 2022
      Sequim Real Estate

      Massive Upgrades to Sequim Real Estate Blog

      August 11, 2022
      Subscription to iRealty Virtual Brokers Real Estate Blog

      How Do I Subscribe to This Real Estate Blog?

      August 11, 2022

      Subscribe to Chuck 
      Marunde's Newsletter

      Popular Stories

      • Buyer and Seller

        What if a Buyer and Seller Talk to Each Other?

        0 shares
        Share 0 Tweet 0
      • Why is Sequim One Of The 10 Best Places To Retire?

        0 shares
        Share 0 Tweet 0
      • How to Terminate a Real Estate Contract

        0 shares
        Share 0 Tweet 0
      • How to Prorate Propane at Closing

        0 shares
        Share 0 Tweet 0
      • The Sequim Blue Hole – A Map of Rainfall

        0 shares
        Share 0 Tweet 0

      Leaving Comments   I hope you’ll join our community and leave comments from time to time. Please realize that comments, if approved, will be public, so do not use any personal information you don’t want broadcast to the world, and definitely don’t leave a phone number. Comments are not the place to ask Chuck Marunde for help in finding a home. To do that, call or text Chuck.

      Neither Chuck Marunde nor iRealty Virtual Brokers offers legal advice on this site. Please Read Our Legal Disclaimer

      If you’d like to view how we protect your privacy, see our Privacy Policy.

      iRealty Virtual Brokers

      iRealty Virtual Brokers reaches out to buyers around the United States with thousands of online articles, MLS sites, apps, real estate books, videos, and much more specifically to help buyers find all the answers to their questions. We also now offer a flat fee commission listing service that saves sellers tens of thousands of dollars.

      iRealty Virtual Brokers
      125 Olympic Ranch Ln
      Sequim, Washington 98382
      360-775-5424

      Search the entire NWMLS in Washington State:

      Sequim-Homes.com

      The largest independent real estate blog in the State of Washington with over 2,200 articles totally focused on our client’s best interest, their needs and their curiosity. All free and 100% reliable. I’m here if you need me, 

      © 2006-2022 iRealty Virtual Brokers and Chuck Marunde

      No Result
      View All Result
      • Home
      • Search MLS
        • Sequim MLS
        • Sequim MLS Map Search
        • Port Angeles MLS
        • Port Townsend MLS
        • San Juan Islands MLS
        • All Islands MLS
        • How to Search the Sequim MLS
      • Videos
        • Sequim Videos Q&A
        • Buyer Videos Part 1
        • Buyer Videos Part 2
        • Buyer Videos Part 3
        • Buyer Videos Part 4
        • Living in Sequim Video Channel
      • Books
        • Sequim Real Estate for Buyers (Free eBook Updates Forever)
        • Sequim Real Estate: A Buyer’s Guide (Paperback)
        • Escaping California to The San Juan Islands
        • Buying & Selling Real Estate in The Rain Shadow
        • Real Estate From Bricks & Mortar to High Tech Virtuality
        • The Seven Myths of Selling Your Home
        • Buying Your Retirement Home
        • The New World of Marketing for Real Estate Agents
      • Agents
        • Professional Buyer’s Agent
        • Flat Fee Listing Broker

      © 2006-2022 iRealty Virtual Brokers and Chuck Marunde

      Welcome Back!

      Login to your account below

      Forgotten Password? Sign Up

      Create New Account!

      Fill the forms bellow to register

      *By registering into our website, you agree to the Terms & Conditions and Privacy Policy.
      All fields are required. Log In

      Retrieve your password

      Please enter your username or email address to reset your password.

      Log In
      This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.