'MO - September 2008 - (Page 18)

cover story Click here to comment on the cover story. Nearly one-third of you who bought a home or condo in the last ﬁve years are “underwater” on your mortgage according to Seattle-based Zillow.com. And if you bought near the 2006 peak, that number is closer to 45%. Factoring in second (and for some, even third) mortgages pushes closer to 60% of homeowners under. Many will ﬁnd themselves unable to sell their way out and for those that do, 43% will have to drop the price. Throw a Lifejacket Around Your Home’s Value By Vincent Kovar determine mortgages, equity and home lines of credit. The appraised value is determined either by comparing your home to others in the neighborhood (this is called “comps”) or by a “cost approach” wherein an appraiser determines how much it would cost to completely replace the home if it were totally destroyed. See the difference? A cost approach is like taking your wedding ring to a pawn shop. You may think it’s worth what you paid for it, but on that particular sales counter the ring is just the sum of its parts. Lenders tend to require that property values cover both the mortgage and their selling costs (remember that the seller pays the real estate agent’s commissions) in case of fore- closure—which brings us to the current market situation. POP! Yet do not despair. ’mo Magazine recently assembled a panel of some of Seattle’s top real estate experts and asked them how to stave of economic waterboarding. Though they each came up with a whole host of ideas, we distilled out these top five lifesavers for raising the value of your home to make it more drop resistant in this slippery market: • Landscape your yard, especially the front yard • Upgrade and update your kitchen • Refresh your ﬂooring • Put on fresh paint • Replace your home hardware The first step to preserving, and perhaps even raising the value of your home, is understanding how home values are determined. There are really two values to your home. The first is your market value and the second is the appraised value. The market value is what your house or condo will sell for on the open market, in other words, what people just like you are willing to pay. Bidding wars and rampant ﬂipping will cause this number to shoot up and inﬂate … like a big, hot bubble. The second number is the appraised value. That’s how much lenders and banks think your home is worth. They use this number to L-R: Mark Gutkowski of Coldwell Banker Bain; Lynn Robertson, owner of Your Seattle Home Team; James Winder of the Landmark Group. 18 celebrating seattle’s gay community http://www.Zillow.com

Table of Contents Feed for the Digital Edition of 'MO - September 2008

'MO - September 2008 Contents Letter From The Editor Voices Instant Activist Pet Project Legally Speaking: Starting Your Own Business EarthTalkTM: Soak Up the Sun ’mo-BIZ: Sternola-Brown Interiors HRC President Hails Biden as V.P. Pick Governor to Attend Annual GSBA Candidate Forum Form & Function: Cable Exercises Build Definition Gay City Health Project Makes a SHIFT Throw a Lifejacket Around Your Home’s Value Feature Film Review: A Jihad for Love Feature Film Review: Ghost Town, starring Ricky Gervais The Return of The Puyallup Fair Book Review: Life with My Sister Madonna by Christopher Ciccone Live Event Preview: Shrek The Musical at The 5th Avenue Feature Film Preview: Trumbo Now on DVD: Itty Bitty Titty Committee SceneOut: People@Places Capitol Hill Guide

'MO - September 2008

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