Liquidation/Quick Sale Value

[Webbed Feet]

Agreed. There are some that are "a legend in their own minds" who simply want to show people how "smart" they are every time they are given a chance. This is sad, I used to like this place a lot more

Yeah, I did too. There were many more incorrect answers than there are now misleading the readers. So it was much more fun posting quotes out of secondary market stuff, USPAP, and texts showing the incorrect answers to be incorrect.

I've noticed we don't have to do that as much anymore. Progress can be boring. I have a great idea. Why don't you outline the text book methods for Grace to follow for discounting to motivate a limited exposure time under that required by the market. Or even answer what was inadequate with that definition of a liqudation value that was posted earlier for her?

Humble me with your vast knowledge and willingness to spend more time than typing in two sentences.....

 

[Grace]

30 Day Quick Value Sale

I knew when I posted that I would be slammed. I just need the help and even when people get frustrated with the questions, they usually help tremendously, so it was worth the try. Can someone let me know the actual steps they go through when they research a quick sale? I really do appreciate the help. I spent a couple of hours yesterday looking through the posts on this forum so I wouldn't have to ask, but I could not find the actual steps that you go through even though I did find several posts of other people asking for the same advice on how to determine the 30 day quick value.

 

[Michigan CG]

Grace,

The way to find your answer is through the market. There, that was easy.

I think you should start with the people actually participating in the market, the people who represent buyers and sellers of these properties. Start off by finding those Realtors in town who specialize in these properties. They are on the front lines, and the ones who are selling these properties as requested by their clients.

Research is your starting point.

 

[rbrienza]

Grace,
I was asked a little while ago to do the same thing on a gas station. what I did was called local RE brokers and bankers and put them in a grid and got a % of a discount from MV, to sell in a quicksale.


View attachment Binder1.pdf

Good luck

 

[Jacqueline Doty]

Dear Jackie,

Perhaps the GSEs would be kind enough to specifically define the LV they are looking for in such situations. The Dictionary of RE Appraisal contains the definition shown earlier in this thread. The dilemma comes from the main body of the FNMA form which confines the appraiser to the definition of MV preprinted in that form.

same as Dictional of RE appraisal fourth edition.

 

[Zmcraney]

Yeah, I did too. There were many more incorrect answers than there are now misleading the readers. So it was much more fun posting quotes out of secondary market stuff, USPAP, and texts showing the incorrect answers to be incorrect.

I've noticed we don't have to do that as much anymore. Progress can be boring. I have a great idea. Why don't you outline the text book methods for Grace to follow for discounting to motivate a limited exposure time under that required by the market. Or even answer what was inadequate with that definition of a liqudation value that was posted earlier for her?

Humble me with your vast knowledge and willingness to spend more time than typing in two sentences.....

Webbed,

While I cannot quote mortgage guidelines and USPAP word for word, I personally feel that if someone asks a question they should receive a DECENT honest answer instead of being bashed and having their competence questioned by the "mightier than though" appraisal guru's who get some sort of pleasure out of belittling those who ask questions on this forum which was created as a way for appraisers to do just that, ask questions to their peers and get answers from those who have been around the block a time or two. Instead of being brash, and damn near offensive I prefer to be more kind hearted and speak TO the person, and not try to speak above them. If this is the way you want to handle your business so be it, but I personally think that you're attitude is a disservice to this site. I am not questioning your competence, just your lack of tact in dealing with those who don't know "everything" as obviously you do. Most of us came to this site for one reason, to learn more about the profession we chose to enter and it's getting to the point where someone won't ask a question for fear of having their competence questioned openly and often by people such as yourself. I don't know if you get some sort of sick pleasure from treating people this way but let me be the first to tell you that I would personally not shed one tear if I never had to read another one of your tirades.

 

[Mr Rex]

You have got to expect that someone that was born with webbed feet and also was a born appraiser would be light on the "you are as special as a snowflake" sentimentality so common in today's society. After suffering the slings and arrows of growing up not knowing if part of his heritage was waterfowl or amphibian, he obviously lashes out as a defense mechanism and anger over his lineage and lack of fitting in with his non-webbed classmates. Oh my my, surely the taunts of the schoolchildren ring in his ears, and haunt his web footed soul. Frog boy, duck boy, and combine the 2 and you get............................ an infraction here at the AF.

 

[Ken B]

30-day liquidation value is essentially what the property would bring at auction. You might want to seek auction sales and determine what, if any (LOL), discount from market value is indicated by auction sales.

Google auction sites for your location and give the companies a call. They are generally more than happy to speak about their experiences.

 

[Surf Cat]

Grace,

If you’re more comfortable with the REO addendum for organizational purposes then use it. You’re going to have to provide the information required in the REO addendum in your attached addendum to give a credible result anyway.

As for what you need for your “liquidation value” in 30 days Mr. Evans gives good advice. Call those realtors with listed / closed comparable REO’s in your neighborhood and describe your property/location and ask how much they would list it for to sell in 30 days. This along with the closed REO’s should give you a pretty good indication of a % to use.

Hopefully, you have a cost resource guide to give an estimate of what your repairs would be (like M&S’s repair and remodel cost guide here:

http://www.marshallswift.com/p-113-the-home-repair-remodel-2009-cost-guide.aspx

Here are a couple of resources for you to check out for yours and competing neighborhoods sales / foreclosure activity.

http://www.cyberhomes.com/ Enter your zip code and go to homes, neighborhoods and neighborhoods nearby.

http://realestate.aol.com/ Enter your zip code in the “compare housing markets” section and research.

How about your mentor? Hopefully you still have good relationship with him/her. Just because your licensed doesn’t mean you cut communication lines. Give him/her a call.

Good Luck!

 

[mgalleshaw]

WWTMD - what would the market do?

The definition from Kinney does not include a 30 day sale threshold. What I would fear is the client is looking for some type of arbitrary heavy discount applied to a market value estimate, to make their marketing threshold easier. With due respect to rbrienza, I think you need to dig a little deeper than that. And if it is how the market works, understand where the discount comes from.
My own experience is that there are some bottom-feeders in the market who would snatch up the property at a no-lose price with the aim of either remarketing it immediately for the profit, or, less likely, carrying that profit through to reversion. There is a specific profit motive, and the discount reflects the net gain and appropriate return. There are deals like this in the market. Find them.
Otherwise, research, document and explain. Go to the market. Does a less 30 day close make a difference in acheivable price? Does it narrow the potential buyers and does any lessened competition impact price? Is 30 days not enough for some investment groups due diligence?
And there is the always present possiblity of auction, as also noted. Some auctioneers are knowledgable in real estate or have associates or contacts with whom they work. Find out about their deals. I would probably do this first, as the rest of the research may mean nothing if an auctioneer can get a real value quickly.
Matched pair the comps. Compare them to unaffected deals. Get the participants insight into the affect of limited marketing - but be sure to get both sides because either might see the deal in way to make his perfomance look better. If necessary, you can have an independent set of comps just to demonstrate how you came to your liquidation value.
And, regarding Mr. Webbed Feet, my guess is he is only looking out for you. Maybe he had or saw a bad experience in this area (see second sentence this diatribe). So, while it is probably beyond the intent of the competency rule, out of abundance of caution I would inform the client if I hadn't experience in estimating liquidation values and give proposed steps to overcome said lack of experience.
Good Luck and let us know how it goes...
Mark Galleshaw
CG Appraiser