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Home backs to busy street: How to value?

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LeapingGnome

Thread Starter
Freshman Member
Joined
Dec 11, 2007
Professional Status
Real Estate Agent or Broker
State
Arizona
I’m a real estate agent working on a CMA for a buyer/client.

The potential purchase is a single family detached home in a large, adult retirement planned community. The home faces a busy, arterial street. I’ve looked for comps that face similarly busy streets but can’t find one. There are several sold homes in this community that could be comps except for that facet.

How would I value this property?


Thank you.
 

Richard Johnston

Junior Member
Joined
Jul 19, 2003
Professional Status
Certified Residential Appraiser
State
Florida
My suggestion is to decline this BPO and state to the company that you are not qualified to perform this valuation. They should order an appraisal from a local Qualified appraiser.

Please don't get offended..In my opinion 95% of the realtors that I know do not know how to extract adjustments.

Richard Johnston
State Certified Residential Appraiser
Licensed Real Estate Agent
 

LeapingGnome

Thread Starter
Freshman Member
Joined
Dec 11, 2007
Professional Status
Real Estate Agent or Broker
State
Arizona
"I’m a real estate agent working on a CMA for a buyer/client."
My client is a home buyer.

An appraisal will be done during the inspection period, but our market has downward pressure on pricing, so our offer will not look just at present comps, but where we think values might be a few months down the road. Some (most?) buyers here are afraid of purchasing a home because they think if they wait a few months they'll be able to get it cheaper.

The busy street is just another issue I'd like to try to factor in.
 

Amy Perkins

Senior Member
Joined
Jul 20, 2003
Professional Status
Certified Residential Appraiser
State
Tennessee
Take another house on with a similar negative site factor and one that does not have that a negative site factor. Extract the adjustment as a factor, for example 10%. Now discount your subject at that rate.
 

leelansford

Elite Member
Joined
Mar 29, 2002
Professional Status
Certified Residential Appraiser
State
Illinois
There has NEVER been a sale in the community of a SFR with a locational influence similar to the situation at hand?
 

Sheikh Yerbouti

Senior Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
Arizona
My suggestion is to decline this BPO and state to the company that you are not qualified to perform this valuation. They should order an appraisal from a local Qualified appraiser.

Please don't get offended..In my opinion 95% of the realtors that I know do not know how to extract adjustments.

Richard Johnston
State Certified Residential Appraiser
Licensed Real Estate Agent


The OP said he/she is doing a CMA, not a BPO. Big difference.

My suggestion would be to look for historical sales of properties in the neighborhood with a similar location. Then compare to otherwise similar properties that sold about the same time that don't face a busy street. That should give you some idea of the percentage of loss to apply to your subject.
 

Jonah

Junior Member
Joined
Mar 22, 2006
Professional Status
Licensed Appraiser
State
Utah
My suggestion is to decline this BPO and state to the company that you are not qualified to perform this valuation. They should order an appraisal from a local Qualified appraiser.

Please don't get offended..In my opinion 95% of the realtors that I know do not know how to extract adjustments.

Richard Johnston
State Certified Residential Appraiser
Licensed Real Estate Agent


:clapping: :clapping: :clapping: :clapping:
 

MBD

Member
Joined
Jan 10, 2005
Professional Status
Certified General Appraiser
State
New York
What do you think is the market reaction to a property facing a busy street? If you go back in time, maybe even a couple of years, would you be able to do a matched pair analysis? In other words, find a closed sale of a property that's on a busy street, and around the same time period, find another closed sale on a quiet street for a similar property.
 

hastalavista

Elite Member
Joined
May 16, 2005
Professional Status
Certified General Appraiser
State
California
I’m a real estate agent working on a CMA for a buyer/client.

The potential purchase is a single family detached home in a large, adult retirement planned community. The home faces a busy, arterial street. I’ve looked for comps that face similarly busy streets but can’t find one. There are several sold homes in this community that could be comps except for that facet.

How would I value this property?


Thank you.

You need to find properties that sold on the busy street and then determine what, if any, impact on market value that location had on those properties. From what you describe is available now, you'd probably have to go back in time to find these sales.
Then, you need to analyze the differences (then) and see how they relate to the subject and market (now). I say "now" because the differences in market conditions can have an impact on how positives or negatives are evaluated in the market. My experience in general is this: A rising market will minimize the negatives and maximize the positives. A declining market will maximize the negatives and minimize the positives. So a small value difference two-years ago in a rising market may be different in today's declining market (if that is your situation).

In your original post, you said you were completing a CMA (not a BPO) for a client who is thinking about listing a house. I understand this is what real estate agents do for a living. You do realize you are asking your question on an appraiser's forum when business is especially slow :new_smile-l: ? So, you shouldn't be surprised if some answers may be "get an appraisal".

However, there are many times when I call real estate agents and ask them how they determined their listing price-strategy. Most of them are happy to tell me and discuss the market. A small percentage say, "you are the appraiser, why don't you figure it out!" I always thought that kind of response was unprofessional. I'm not trying to sell homes, I'm trying to understand how the market works. But maybe I caught those few during a bad month?
It is in that spirit that I have no problem giving you some basic feedback to your issue. Listening to me may solve your specific issue; it isn't going to make you an appraiser. And you successfully listing your property at an appropriately market-derived price is going to be helpful to all concerned; your client, the buyer, the lender and the appraiser. The fact that you are coming onto this forum and asking for professional feedback is encouraging to me and tells me you want to do your job as diligently as possible.

Just do me a favor: When the roles are reversed and an appraiser asks you a question why you chose the listing strategy you did, don't respond with
Well, why don't you sell a few houses and figure it out yourself. :laugh:

Thanks and good luck!
 
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