New condition property with damaged flooring "as is."

[Terrel L. Shields]

posts about a $3,000 cost to repair. So yes I would adjust down 9K for the 3K repair that's needed.

But ultimately would find someone to do it for $1199??? ...that's what most rehabbers do.

 

[George Hatch]

e.g. the fact that a lower offer would have killed the deal means that the lower offer would have been, wait for it...... below market. Or is that not real world either?

All of these alternatives are possible, but that only means that it pays to develop the opinion within the context of the market segment in question, not make assumptions one way or another.

My guess is that a $3,000 CTC might play differently in a market where homes are selling for $60k than in markets where they sell for $600k.

 

[jay trotta]

not necessarily true. when i bought my home the inspection found loads of mold in the attic (kitchen stove vent and bathroom exhaust vent both just went into the attic, which was a hip roof without any soffit venta and only a ridge vent that was about 1/2 of the width of the house). brought in a remediation company who estimated $5k for repairs. i countered my offer by $5k less -or- having the seller make the repairs. seller gladly took $5k off the price, so in my example with real world real estate experience as a home owner, home seller and appraiser the discount was the exact amount of the repair required. if i had lowered my offer by more, say $7k or $10k, the deal would not have completed.

Key component is; (IF) you don't know how that would have turned out (not that you are wrong, but you don't know for a fact). Most folks I've run across in my market area respond to Environmental Issue's in a very different manor; either they seek a Huge Discount or they run away. Again it depends on your market area.

 

[alebrewer]

My guess is that a $3,000 CTC might play differently in a market where homes are selling for $60k than in markets where they sell for $600k.

My guess is that you'd be correct.

 

[TRESinc]

Key component is; (IF) you don't know how that would have turned out (not that you are wrong, but you don't know for a fact). Most folks I've run across in my market area respond to Environmental Issue's in a very different manor; either they seek a Huge Discount or they run away. Again it depends on your market area.

based upon my real world experience as a buyer/seller and appraiser in this market, and the negotiations that had occurred prior to signing the contract, logic dictated that anything above and beyond the cost of repairs would have resulted in the deal not happening.

let's flip it. if YOU were selling a house and found it needed $5k in repairs after you had negotiated with a buyer and the buyer came back and said they wanted $10k off for a $5k repair or no deal, would you lose an additional $5k because someone asked you to give it to them for free?

 

[jay trotta]

based upon my real world experience as a buyer/seller and appraiser in this market, and the negotiations that had occurred prior to signing the contract, logic dictated that anything above and beyond the cost of repairs would have resulted in the deal not happening.

let's flip it. if YOU were selling a house and found it needed $5k in repairs after you had negotiated with a buyer and the buyer came back and said they wanted $10k off for a $5k repair or no deal, would you lose an additional $5k because someone asked you to give it to them for free?

Lets not flip anything; (no goading); you now have expanded more light on your original comments, don't you think ??

 

[Terrel L. Shields]

My guess is that a $3,000 CTC might play differently in a market where homes are selling for $60k than in markets where they sell for $600k.

At least expectations would be different. I would assume a $60k home is probably going to have issues and buyers would expect so. OTOH is it a given that someone paying $600,000 for a repaired home but reject $597,000 for the home with $3000 C2C?

 

[alebrewer]

I would assume a $60k home is probably going to have issues and buyers would expect so.

Come now, Terrel - why would you assume a $60k home would have issues? Is it possible that $60k is the market for some homes? I know appraising is a very lucrative business, but that's a dangerous assumption to make - especially as an appraiser.

 

[George Hatch]

The fundamental concepts and principles provide the foundation; the individual applications are simply expressions of those concepts and principles.

The point of the comparo is that in each case this will be an opinion to be developed; not an assumption to make. All RE is local, right?

 

[Terrel L. Shields]

Come now, Terrel - why would you assume a $60k home would have issues? Is it possible that $60k is the market for some homes? I know appraising is a very lucrative business, but that's a dangerous assumption to make - especially as an appraiser.

A $60k home here is either a MH, or it is 40 years old. I can look around my house and see lots of things that will get updated. I can find $3,000 worth in a jiffy. Closet light, kitchen light, dishwasher is marginal, stove is old, carpet could be replaced, porch needs paint, one of my new Simington windows isn't working, CHA works but is near the end of life with outdated freon...hey, I'm up to $10 k now...but which of these defects will the appraiser notice?