One of the most common tasks for a real estate agent is to prepare a Comparable Market Analysis (CMA) for homeowners who are considering selling their home. An official appraisal would cost several hundred dollars, but I provide this service FREE, as a tool for homeowners to establish a selling price before putting their home up for sale.
One of the biggest challenges for any real estate agent is to prepare a price analysis on unique properties. The Wenatchee real estate market has lots and lots of unique properties and it is often difficult to find true "comparables" to establish an accurate value.
Until the last few years there really weren't any housing developments, where homes of similar style, age, and size were built within close proximity to each other at the same time. With unique properties, it is necessary to find the "most comparable" properties then use adjustments and compensating factors to establish a price.
When doing a CMA, I look for homes of similar actual age, amenities, square footage, lot size, and location. I use recently "sold" and currently "listed" properties in the analysis. I also look at "expired"listings to see what price similar homes did not sell for.
When I can't find homes of similar actual age, it is necessary to find homes with a similar "effective age"... or use a depreciation factor to offset the age difference. An example of the "effective age" factor would be a home that is actually 40 years old but has been highly updated and upgraded, giving it an "effective age" of, say, 10 years. So, once the "effective age" is established, the home can be compared to those of similar "effective age", not actual age. Also, if I must compare the home to newer homes, a depreciation factor can be used.
There are other considerations, of course, but this gives you a feel for some of the variables used to determine value on a unique property. CMA's have proven to be quite a reliable way of establishing market value for a home but, ultimately, it comes down to what price a buyer is willing to pay for the home.
As an additional note, be aware that when the home does sell, the buyer's bank will require a professional appraisal (paid by the buyer) in order to get financing on the home. This is the bank's documentation for security that the home is worth what the buyer has agreed to pay.
Best Regards,
Erin Davidson
Aspiring to be your Wenatchee real estate agent
Wenatchee Real Estate: $2.86 a Day to Mortgage Freedom
Buying a home in Wenatchee (or anywhere) is a mix of emotional and financial considerations. The emotions are way more difficult to quantify than the financial benefits.
Here is an interesting article on keeping the emotions of buying a home in perspective.
Aside from the emotions, the financial benefits of buying a home are fairly straight forward and indisputable. Oh, you're probably thinking about the housing bubble and all those people who got foreclosed on and their home was worth less than what they paid. And, that is a fact. There is no denying it. But, that is a subject for another day and I am so thankful Wenatchee real estate did not suffer the devastating price declines in many other markets.
What I really want to share with you today is how to, painlessly, pay your mortgage down early and save tens of thousands of dollars in interest payments in the process.
If you are currently buying a home, have you ever actually looked at the amortization schedule of your mortgage payments? An amortization schedule is a table detailing each periodic payment made on a loan. It outlines how much of each payment goes toward interest and how much is being applied to the principal pay-down on the loan.
For example, on a $200,000 home, with a 20% down payment at 5.25% interest with a typical 30 years mortgage:
Loan Balance: 160,000
For example, on a $200,000 home, with a 20% down payment at 5.25% interest with a typical 30 years mortgage:
Loan Balance: 160,000
Total monthly payment (interest & principal) = 883.53
First Month:
Interest payment: $700.00
Principal: $183.53
After 10 years, the breakdown looks like this:
Interest payment: 573.64
Principal: 309.89
The loan balance at the end of 10 years is: $130,807.36
Literally, every month the interest portion of the payment goes down, and the application to principal goes up.
Now... let's see what happens if you pay just $80 more per month. That is $20 per week, about $2.86 per day (less than a gallon of gas). Could you find a way to save $20 per week if you really try? You could deduct $20 every Friday from your checkbook and add it to your regular payment each month. Here's what happens:
Regular payment: 883.53
Extra payment: $80 ($20 week)
At the end of 10 years:
Loan Balance: $118,527.09
Wow! Your loan balance is now $12,280.27 LESS than it would have been, after just 10 years!
This does two great things! First, If you continue to make payments like that, your mortgage will be paid off almost 6 years early and you will save over $60,000 in interest! Second, If you decide to sell your home before the mortgage is paid off, you have built equity quicker and you will have more money to put into your next home (or your pocket).
These are just sample numbers, of course. The higher the loan balance and higher the interest rate, the more dramatic the savings. Play with the numbers to suit your specific situation, but you get the idea. Go to BankRate.com to use their amortization calculator.
The moral of the story is: Pay just a little extra money as you go and you will save big money at the end. What would you do with the extra money if you have no mortgage payment? That is another story for another day!
Best Regards,
Attn: Wenatchee Real Estate Investors
I hope everyone had a wonderful Valentine's Day! Whether you have a "significant other" or not, every day is a great day to spread the love and tell all the important people in your life how much you appreciate them.
Today I am shifting gears just a little and want to share some resources for Wenatchee real estate investors. Whether you prefer to invest in single family homes, multi-family units, apartment complexes, or commercial buildings, there are some great Wenatchee real estate investment opportunities to consider. Investing is an art in itself and it is always good to have plenty of resources available to expand your knowledge and help make good decisions before and after a purchase.
The Mr Landlord website has been around a long time and is a true plethora of information and resources for any current or wannabe landlord... including (but not limited to) forms , landlord software, tenant screening services, finding ex-tenants, Q&A Forums, conferences and much more!
Another wonderful resource, especially for articles BY expert investors is The Bigger Pockets Blog, which is part of the Bigger Pockets website. You can subscribe for free but, if you do, be prepared to get one (and often more) emails per day with new articles. Or, if you prefer, you can just "favorite" the page and check back regularly.
I'm sure there are other great real estate investment resources too, but these two are certainly a good place to start.
Best Regards,
Erin Davidson
Aspiring to be your Wenatchee real estate agent
Today I am shifting gears just a little and want to share some resources for Wenatchee real estate investors. Whether you prefer to invest in single family homes, multi-family units, apartment complexes, or commercial buildings, there are some great Wenatchee real estate investment opportunities to consider. Investing is an art in itself and it is always good to have plenty of resources available to expand your knowledge and help make good decisions before and after a purchase.
The Mr Landlord website has been around a long time and is a true plethora of information and resources for any current or wannabe landlord... including (but not limited to) forms , landlord software, tenant screening services, finding ex-tenants, Q&A Forums, conferences and much more!
Another wonderful resource, especially for articles BY expert investors is The Bigger Pockets Blog, which is part of the Bigger Pockets website. You can subscribe for free but, if you do, be prepared to get one (and often more) emails per day with new articles. Or, if you prefer, you can just "favorite" the page and check back regularly.
I'm sure there are other great real estate investment resources too, but these two are certainly a good place to start.
Best Regards,
Erin Davidson
Aspiring to be your Wenatchee real estate agent
Wenatchee Real Estate: 2013 Round-up
Happy 2014 from the Davidson Team!
First, we'd like to thank everyone who made 2013 a great year for us... our clients, North Central Washington Association of REALTORS affiliates, and our REALTOR Associates. We feel so fortunate to be working in the Wenatchee real estate industry and raising our family in this beautiful Wenatchee valley.
It seems no matter where we go, people are curious about the real estate market. "How is the market"? "What are prices doing"? "Is it a good time to buy a home in Wenatchee"? Is it a good time to sell my home"?
Let's review what happened in 2013 and it might give us a clue as to what we can anticipate for this year. The best source of Wenatchee real estate data is the Pacific Appraisal SNAPSHOT, published each month.
Here is a quick summary breakdown of market activity over the last 3 years:
Dollar Volume of homes/condos sold:
2011 = 198,554,125
2012 = 247,472,778
2013 = 295,438,677
Number of homes/condos sold:
2011 = 801
2012 = 1013
2013 = 1132
Average home/condo sales price:
2011 = 247,863
2012 = 244,297
2013 = 260,988
Median home/condo sales price:
2011 = 212,900
2012 = 215,000
2013 = 220,000
If you go into the Snapshot mentioned earlier, and look at the graphs on page 3, you will see the height of the market was 2005 - 2007. The market bottomed out in 2011, with the exception of the average sale price. Median price is a better indicator of true activity, because one unusually high priced sale can skew the statistics for the entire month and year.
So, what does all this mean?
Wenatchee weathered the real estate bubble way better than a lot of markets. Our price drops were far less dramatic than many markets across the country. This is for many reasons, but our strong and diverse economy, abundant recreational opportunities and 300 days with sunshine are big factors.
Wenatchee's economy is so diverse, it shields us from critical downturns experienced by areas who depend largely on one or two major employers. The Wenatchee Valley has 7 major employers:
1) Agriculture industry, 2) Hydro power industry, 3) Aluminum production plant, 4) Medical services, 5) Local, State and Federal government agencies, 6) Educational services, and 7) Tourism... and, of course, all the support services necessary to keep things flowing.
So, to answer the earlier questions:
What is the real estate market doing? Improving
What are prices doing? Going Up
Is it a good time to buy a home? Yes, before prices (and interest rates) rise further
Is it a good time to sell a home? Yes, as prices rise on your home, prices will be rising on any future home you wish to buy.
Best Regards,
Erin Davidson
Aspiring to be your Wenatchee real estate agent
Aspiring to be your Wenatchee real estate agent
Free search of the Wenatchee MLS, featuring homes from Wenatchee, East Wenatchee, Malaga, Rock Island, Cashmere, Leavenworth and properties from other surrounding communities.
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