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30 day quick sale

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Ralph in Florida

Thread Starter
Freshman Member
Joined
Aug 13, 2008
Professional Status
Certified Residential Appraiser
State
Florida
I am looking for sources, references, or methods to determine a 30 day quick sale value.

Thanks,
Ralph In Florida
 

Thomas Fiehler

Senior Member
Joined
Jun 2, 2003
Professional Status
Certified General Appraiser
State
Ohio
Not wanting to be a smart ***, but check your market. There are some areas, likely in better times, that if a listing is priced right, the normal marketing time is under 30 days. If all your sales indicate 120+ DOM, then a substantial discount will be needed. It just depends on the condition of the market, condition of the property and its competition. I don't believe you will find anything as a reference but consider it more of a salvage value assignment.
 

Richard Carlsen

Elite Member
Joined
Jan 15, 2002
Professional Status
Licensed Appraiser
State
Michigan
Review as many sales as possible. Segregate those that sold in under 60 days. Grid 3 or 4 of the most relevant sales against 3 or 4 relevant sales that took nearly forever to sell. What you should come up with is a range in the indicated sales price at the bottom of the grid which will show that the quick sales were priced -XX% less than those that took a long time. That is the market indication of the discount that is required to generate a sale under 30 days. I just finished an REO and by doing this, confirmed my previous investigation that showed in order to get a sale in under 30 days, based on Liquidation Value, it took a reduction of -18 to -22% in the selling price in one of our suburban markets. This range appears to be fairly common in our area right now.

BTW, if the client asks for an "As is" value based on the definition of Market Value contained in the 1004/2055 and a value based on a quick sale of under 30 days, realize that you are giving two values based on two different definitions of value. When I have a client impose a time limit on the sale, then I always include a copy of the definition of Liquidation Value in the report since we are obligated to define value in the report. Liquidation Value normally differs in only one element: The seller is under extreme compulsion to sell. It's important to put that distinction into a definition to define what the under 30 day estimate of value is.
 

leelansford

Elite Member
Joined
Mar 29, 2002
Professional Status
Certified Residential Appraiser
State
Illinois
And, don't forget:

And, don't forget:

See Standards Rule 1-2 (c) and 2-2(b)(v)...assuming here a Summary Report for the latter.
 

Richard Carlsen

Elite Member
Joined
Jan 15, 2002
Professional Status
Licensed Appraiser
State
Michigan
I use the definition supplied by one of my clients for Liquidation Value and just cut/paste it in the addendum noting that it is used for the time restricted value in place of Market Value.
 

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  • Liquidation Value.jpg
    Liquidation Value.jpg
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Lloyd Bonafide

Senior Member
Joined
Jan 15, 2006
Professional Status
Certified Residential Appraiser
State
California
I am looking for sources, references, or methods to determine a 30 day quick sale value.

As far as a method, it's very simple. Price the property slightly below market value, to the point where it should sell almost immediately.

Most REO listings in this area are now priced extremely competitively, and their average marketing time in some areas is probably 15-20 days. Many are selling with multiple offers, many times 5 or more offers.

I am seeing some REOs that are priced well below market, and I have heard of many that receive 10, 15, even 20 or more offers. That's when you know they are priced a little too low, and then it sometimes turns out almost like an auction, and the highest offer may come in 5% or more above the list price.
 

Jeff Horton

Senior Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Alabama
I do these quit regular, the above advice is right on. Study the market data and determine what is selling and how fast. I am assuming this is foreclosure sale.

What I typically do is find comparable foreclosure sales. See what their market times were, in my market typical 90-120 days. If I am lucky I will find a quick sale and can determine something from that. But usually in MY MARKET I have to add another 10% or more discount over what my foreclosure sales are showing me to make it sale really quick. Of course if it is in bad shape it might need to be more. But it is a judgment call.
 

leelansford

Elite Member
Joined
Mar 29, 2002
Professional Status
Certified Residential Appraiser
State
Illinois
I use the definition supplied by one of my clients for Liquidation Value and just cut/paste it in the addendum noting that it is used for the time restricted value in place of Market Value.

I was thinking along those lines (in your attachment).

I wonder how many appraisers communicate a (for example) "quick sale value" without also defining (as required by the USPAP) the value? My guess (and it's only a guess-timate): Most appraisers fail to so define.
 
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