...the property is so unique, there is just When I was an agent, I had a number of sellers in similar
situations. One seller in particular called me one day to list her home. It was a beautiful home. High-end finishes on a stunning piece of property. There wasn’t anything in the neighborhood that could touch it in terms of quality. If thatwasn’t bad enough, all the neighborhood comps I
had to compare the home to were from a full eight months previous. The market had shifted in the last six months to a much faster-paced market and prices had appreciated at a faster pace than usual. I knew it, but it wasn’t until I moved my focus out further to adjacent neighborhoods that I could see how much they had appreciated, measure the apprecia- tion, and apply that to the subject property. Because homes had appreciated and I knew how fast they
were selling, I priced the home aggressively and – sure enough – received multiple offers. The seller was thrilled with the result. But we wouldn’t have arrived at that result if I didn’t get creative and determine how else I could arrive at a market price without comparables. Even when you do have some comparables, you can usu-
ally attain more by adjusting your focus to include more area – or more time. In my case above, since I couldn’t tell what the market was doing at the focused-in neighborhood level, I made my view broader to include additional neigh- borhoods. As an agent, I would also make my view broader to include more time (go back not just 90 days but six months or more for comps). When you have no comparables, you must take out your
measuring stick and ask, “What can I measure with this?” And while there isn’t a single measurement you can rely on in every situation, you can use these to compare against each other to “check your work”. The five tools I always had as a comparable backup in-
cluded:
1) PRICE PER SQUARE FOOT COMPARISON In this document, I would not only measure the price per square foot of properties that did sell, I would also measure recent expireds. Sometimes the data from recent expireds can be just as telling – if not more so – than what actually sold.
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nothing that comparesto it.
2) HISTORICAL RECORDS OF MULTIPLE SALES AND APPRECIATION Sometimes it pays to look back in history at appreciation, not just what a property sold for. For example, say you have the following properties and the subject property in a neigh- borhood which all sold for around the same price at around the same time:
MOST LAST SALES Property 1
RECENT SALES
DATE PRICE DATE PRICE APPRECIATION 10/3/2003 $251,950 8/31/2012
Property 2 7/25/2003 $274,000 4/30/2012 Property 3 1/26/2004 $305,000 12/15/2012
Subject property
AVERAGE APPRECIATION:
$324,660 28.85% $350,000 27.74% $398,000 30.49% 29.03%
12/20/2003 $257,000 If Subject Property appreciated at this same average rate, the result would be about $330,000.
3) MARKET PREDICTOR USING ASSESSED VALUES I love this tool because not only is a good one to have in your back pocket for situations such as these, but it also works wonders for explaining to homeowners why the mar- ket value of their property does not match the assessed value. With this tool, assessed values of recently sold properties are compared against their final sales price. From this data, a ratio is created which can then be applied to the subject property. For example:
ASSESSED VALUE
Property 1 Property 2 Property 3
Subject property
$207,000 $201,000 $219,000
$229,000
SALE PRICE $251,950 $274,000 $305,000
AVERAGE RATIO: Using the assessed
value analysis:
RATIO 1.22 1.36 1.39 1.32
$302,280
GEORGIA REALTOR®
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