Sales Comparison Grid & Cost to Cure

[Zoe]

Cost to cure is fine to support adjustment in sales comp approach.. Get a grip.

 

[Zoe]

One more time. The typical buyer and seller look at market costs and profit incentive.

 

[J Grant]

Cost to cure is fine to support adjustment in sales comp approach.. Get a grip.

You just went from the cost approach to the cost to cure. C2Cis straight costs and sometimes it might be equivalent to the market reaction and other times way off base.

 

[J Grant]

One more time. The typical buyer and seller look at market costs and profit incentive.

Go back in your corner! The typical investor and builder or flipper looks at costs and profit incentive.

The typical buyer looks at te total price they pay for a property and the typical seller looks at the total price they will sell it for. The seller might take a loss if they spent too much in cost that buyers do not want to pay. ( an over-improvement or super adequacy)

 

[Zoe]

 

[Zoe]

Go back in your corner! The typical investor and builder or flipper looks at costs and profit incentive.

The typical buyer looks at te total price they pay for a property and the typical seller looks at the total price they will sell it for. The seller might take a loss if they spent too much in cost that buyers do not want to pay. ( an over-improvement or super adequacy)

I can't even comprehend your reasoning.. Every buyer and seller looks at cost.

 

[J Grant]

I can't even comprehend your reasoning.. Every buyer and seller looks at cost.

I sold RE for over 5 years and the buyers did not ask about cost. They might have a rough idea of a feature they like such as upgrades and a pool, but they are looking at the total price of a house.

 

[George Hatch]

The case in the OP is about a physical deficiency which will have a cost to cure. You cannot get to a discount factor from "as is" without first quantifying that cost, and then proceeding to gauge the market's reaction to that cost whether that reaction amounts to a win, a loss or a draw.

The discount for a partially completed roof will probably be different than the discount for "needs new paint", and the reason that discount will be different is primarily because of the difference in costs. The estimated cost isn't the difference, but it is a component of the difference.

 

[Fernando]

Are appraisers that good in estimating cost to cure?
In one appraisal, I was fortunate to have a contractor at time of my appointment and using Fernando charm, I got a quote to repair the missing tiles in the unusable shower stall. It was less than $1,500 so I found that insignificant and lender also must have agreed.
In another case, there was this sale in which the list price was extremely low but it was due to a fire damaging the front porch entry. When it sold I was surprised the purchase price was low considering my estimate to repair that porch. Must be more extensive and maybe other deferred issues in that house.
As appraisers, it's best not to mess with cost to cure if possible.

 

[George Hatch]

I constantly ask people about the costs they paid for any recent improvements that I notice. Everything from paving to fences to HVAC units to appliances to major remodels. Appraise properties with proposed improvements or rehabs and look at those costs. Do that for a few years and after a while it adds up.