J Grant
Elite Member
- Joined
- Dec 9, 2003
- Professional Status
- Certified Residential Appraiser
- State
- Florida
OP, as to RE agents and SF and "showing their work" ....for pricing...they often in a single family house, take the total purchase price (house and lot/ amenities), and divide the sales price by sf of the dwelling. In this method they come out with very high $ per sf. I've had agents tell me "house X is worth $300 per sf" while it might only cost $150 per sf to build...
They also can combine disparate condo units, such as units with a view and divide the sale prices by SF to show buyers what a subject is "worth" per SF, while subject unit is worth less per SF since it has no view.
Buyers who rely solely or mainly on agent representation about worth per SF or accuracy of SF of properties can be misled aka not well informed.
Which is why the MV definition references a well informed/well advised buyer. The well informed theoretical buyer we use to vet for market value might make different decisions than a real world, not well informed buyer.. Which can account for a difference between an appraiser's opinion of market value (based on decisions of the theoretical buyer in the MV definition), vs the actual decision (CS price or sale price) of a less well informed or well advised buyer .
They also can combine disparate condo units, such as units with a view and divide the sale prices by SF to show buyers what a subject is "worth" per SF, while subject unit is worth less per SF since it has no view.
Buyers who rely solely or mainly on agent representation about worth per SF or accuracy of SF of properties can be misled aka not well informed.
Which is why the MV definition references a well informed/well advised buyer. The well informed theoretical buyer we use to vet for market value might make different decisions than a real world, not well informed buyer.. Which can account for a difference between an appraiser's opinion of market value (based on decisions of the theoretical buyer in the MV definition), vs the actual decision (CS price or sale price) of a less well informed or well advised buyer .
Last edited: