• Like
  • Save
Pro Pricing 02 09
Upcoming SlideShare
Loading in...5
×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

Pro Pricing 02 09

  • 186 views
Published

Recently developed presentation concerning pricing listings in the current market

Recently developed presentation concerning pricing listings in the current market

  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Be the first to comment
    Be the first to like this
No Downloads

Views

Total Views
186
On SlideShare
0
From Embeds
0
Number of Embeds
1

Actions

Shares
Downloads
0
Comments
0
Likes
0

Embeds 0

No embeds

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
    No notes for slide

Transcript

  • 1. Francois K. Gregoire, IFA, RAA State Certified Residential Appraiser #142 Distressed Properties PRICING
  • 2. PREPARED FOR:
  • 3. about Frank………...
    • Licensed since 1976
    • Realtor® since 1977
    • Appraising since 1977
    • State-Certified Residential Appraiser since 1989
  • 4. about Frank………...
    • Real Estate License Law and Appraisal Instructor since 1977
    • Member Florida Real Estate Appraisal Board February, 2000 – February, 2008
    • Qualified Expert Witness - Pinellas County Circuit Court, Florida Division of Administrative Hearings, United States Bankruptcy Court
  • 5. TODAY
    • Price versus Value
    • Sales Comparison Approach
      • Elements of Comparison
      • Selection of Comparable Sales and Listings
      • Adjustment Technique
    • Communicating your pricing recommendation
  • 6. PRICE
    • The quantity of one thing which is exchanged for another
    • The amount of money paid, asked, or offered where sale is contemplated
  • 7. MARKET PRICE
    • the price actually given in current market transactions
  • 8. VALUE
    • the quantity of one thing which can be obtained in exchange for another
    • a fair return or equivalent in goods, services, or money for something exchanged
    • the monetary worth of some good, asset or service
  • 9. MARKET VALUE
    • The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus . Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby:
  • 10. MARKET VALUE
    • 1. buyer and seller are typically motivated
    • 2. both parties are well informed or well advised, and acting in what he considers his own best interest
    • 3. a reasonable time is allowed for exposure in the open market
    • 4. payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto
    • 5. the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.
    • * Fannie Mae
  • 11. SALES COMPARISON APPROACH
    • Value or Price derived by comparison of SALES and/or LISTINGS to SUBJECT PROPERTY
    • Assumes Value or Price is directly related to prices of similar, competitive properties
    • Focus is on similarities and differences among properties that affect value or price
  • 12. UNDERLYING PRINCIPLE
    • SUBSTITUTION
    • The value of a property tends to be set by the price that would be paid to acquire a substitute property of similar utility and desirability within a reasonable amount of time
  • 13. ELEMENTS OF COMPARISON
    • Characteristics of Properties-Transactions that cause Prices Paid to Vary
    • Financing Terms
    • Conditions of Sale
    • Market Conditions
    • Location
  • 14. ELEMENTS OF COMPARISON
    • Characteristics of Properties-Transactions that cause Prices Paid to Vary
    • Physical Characteristics
      • Size
      • Construction Quality
      • Condition
      • Amenities and Extras
  • 15. SELECTION OF COMPARABLE SALES AND LISTINGS
    • Worthy of Comparison
    • Competitive with Subject
    • Same Highest and Best use
    • Similar to Subject in date of sale, location, size, design, construction, age, condition, physical characteristics
  • 16. ADJUSTMENT TECHNIQUE
    • Adjustments made to Comparable
    • Make the Comparable equal to Subject
    • Difference-Significant enough to Affect Market Behavior
    • Measurable
    • Superior Feature – Negative Adjustment
    • Inferior Feature – Positive Adjustment
  • 17. OUR TASK
    • Broadmoor Subdivision
    • Built 1957
    • Concrete Block Construction
    • Two Bedrooms – One Bath
    • One Attached Garage
    • 879 Square Feet
  • 18. SEARCH CRITERIA
  • 19. SEARCH CRITERIA
  • 20. SEARCH RESULTS
  • 21. SEARCH RESULTS
  • 22. SEARCH RESULTS
  • 23. SEARCH RESULTS
  • 24. SEARCH RESULTS
  • 25. SALES PRICE PER SQUARE FOOT OF LIVING AREA why?
  • 26.
    • Price effectively. Unless you can arrive at a reasonable price for the home, the listing will become a burden instead of an opportunity. Have a price range in mind before you go to the listing.
    • Don’t rely solely on comparables to develop a price recommendation. Consider supply and demand and the competition.
    • Do consider marketing time. The seller or servicer may have a limit on the time to market the property.
    • Do weigh the home’s condition. Pricing a short sale or foreclosure is most often based on the AS IS condition of the property. The condition of the property may limit the financing options and require a cash sale.
    PRICING
  • 27.
    • USE MLS Data to illustrate your conclusions. Show examples to demonstrate the effect of pricing errors (price reductions, extended marketing times, expired listings)
    • Explain your data and analysis
    • Make a convincing case for your conclusion and recommendation
    COMMUNICATING
  • 28. EXAMPLE
    • As of the effective date of this Price Opinion the Suncoast Multiple Listing Service reports there are 38 active listings of single family residences similar to the subject in age and size within the Neighborhood Boundaries described. Only two listings similar to the subject in size are listed as pending.
    • In the past twelve months, the Suncoast Multiple Listing Service reports there have been 36 sales of residences similar to the subject in age and size within these Neighborhood Boundaries. These range in price from $56,500 to $160,000 and average $105,200. Although the average time on the market for active listings in this area is over three months, some listings have been on the market for over one year.
  • 29. EXAMPLE
    • Price reductions are common, as are listings expiring from the multiple listing service without sale. Over 40 listings of single family residences in this neighborhood similar to the subject in age and size expired from the multiple listing service in the past twelve months.
    • Supply exceeds demand in this area. Competition from short sales and lender owned properties is becoming more prevalent and has a negative effect on prices, values and marketability. Nearly one third of the active listings in direct competition with the subject are marketed as short sales or pre-foreclosures.
    • Value decline in this area averages to about 1% per month over the past twelve months.
  • 30. SUGGESTED LIST PRICE? ?????????
  • 31. Francois K. Gregoire, IFA RAA State Certified Residential Appraiser #142 Gregoire & Gregoire, Inc. Realtor - Appraiser 727-344-3393 [email_address]
  • 32.  
  • 33. HOW MUCH TO ADJUST? Methods
    • Paired Sales
    • Cost Analysis
    • Capitalization of Rent Differences
  • 34. NOT PROVIDED TODAY The "LIST"
  • 35. PAIRED SALES GARAGE 1590 1600 1550 SIZE 4/2 4/2 3/2 BR/BATH ? GARAGE VALUE 2 Car 1 Car 2 Car GARAGE 4/2008 4/2008 2/2008 DATE OF SALE $266,000 $260,000 $265,000 SALES PRICE SALE #3 SALE #2 SALE #1
  • 36. PAIRED SALES POOL 1590 1600 1550 SIZE 4/2 4/2 3/2 BR/BATH ? ? POOL VALUE Above Ground None In Ground POOL 4/2008 5/2008 3/2008 DATE OF SALE $262,000 $260,000 $277,500 SALES PRICE SALE #6 SALE #5 SALE #4
  • 37. COST ANALYSIS
    • Cost to Cure
      • Painting
      • Flooring
      • Repairs
    • Depreciated Cost
      • Amenities and Extras
  • 38. DEPRECIATED COST = = X X $ 6,500 INDICATED VALUE OF ONE GARAGE SPACE $ 6,552 DEPRECIATED COST -$ 3,685 36% 25/70 LESS DEPRECIATION EFF.AGE/LIFE $10,237 $31.50 325 GARAGE COST NEW COST/SF SIZE
  • 39. Capitalization of Rent GRM = 137 Develop Gross Rent Multiplier 137.84 = $1,850 ∕ $255,000 2 136.22 = $1,850 ∕ $252,000 1 GRM = Actual Rent ∕ Sales Price Sale #
  • 40. MARKET RENT 1590 1600 1550 SIZE 4/2 4/2 3/2 BR/BATH ? RENT VALUE OF POOL Above Ground None In Ground POOL 4/2008 5/2008 3/2008 LEASE DATE $1800 $1800 $1925 ACTUAL RENT RENTAL #3 RENTAL #2 RENTAL #1
  • 41. VALUE OF POOL $17,125 = 137 X $125 VALUE = GRM X MARKET RENT
  • 42. RESULTS
    • Garage
      • $5,000, $6,500
    • Pool
      • $15,500, $17,125, $17,500
  • 43. COMPARISON GRID + 6,000 1 CAR + 6,000 1 CAR 2 CAR GARAGE 3/2 4/2 3/2 BR/BA $283,500 $283,000 ADJUSTED PRICE INGRND +17,000 NONE INGRND POOL 3/2008 4/2008 6/2008 DATE $277,500 $260,000 SALES PRICE ADJUST COMP #4 ADJUST COMP #1 SUBJECT
  • 44. Francois K. Gregoire, IFA RAA State Certified Residential Appraiser #142 Gregoire & Gregoire, Inc. Realtor - Appraiser 727-344-3393 [email_address]