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what if there are no comps?

Posted by fallingwaters (My Page) on
Fri, Aug 3, 12 at 9:14

we're almost ready to get selling and still figuring out the best way to proceed.
finding comps is the problem, as we have the most scenic and user friendly property and i suspect the spiffiest master bdrm suite in the neighborhood.
we have a mix of residential, resort and rentals properties all around us, and there are two 'sexier' resorts 20 minutes away.
this town is so small that there is very little on the market, and comps are for similar size homes in the school district--but in developments and mostly kind of cookie cutter.
if we could pull comps from a 15 or 20 mile radius we'd be good, but we're on the edge of our county and realtors won't look for comps outside the school district.
is there any way to expand the comp search?


Follow-Up Postings:

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RE: what if there are no comps?

If realtors won't look for comps outside the district the question is would an appraiser? Unless your target buyer would be all cash then my guess is the comps would be what an appraiser would use too. There are some adjustments that can be made based on lot size, features etc, but they are usually not a huge difference. Maybe it would be worth it to pay for an appraisal.


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RE: what if there are no comps?

Your comps are your neighborhood and immediate surroundings. A view is nice selling point, but won't be used in an appraisal. The spiffiness of your MB won't either.

Homes on the market aren't comps either. You need to look at what has sold in your immediate area.

Hoping to set your price based on what homes are selling for in a "sexier" area is a recipe for disaster.


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RE: what if there are no comps?

The nicest and largest house in any neighborhood always is penalized when it comes to appraisals and selling. If the smaller and less fancy sold properties in your immediate neighborhood are selling for $85 a square foot, then you can usually figure on your home for selling for at least 15% less per square foot. So, if your neighbor's sold home of 2500 square feet sold for 212K, and your home is 4000 square foot, your most likely selling price would be around 289K, not 340K.

EVERYTHING about real estate is location, and you cannot escape that, no matter how nice your house is. A "million dollar house" isn't a million dollar house when it's located in a neighborhood of 20K shotgun homes.


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RE: what if there are no comps?

location location location.
easy commute--check
resort area--check
great schools--check
high end homes nearby--check

however the higher end homes here don't come on the market frequently,hence the lower comps from surrounding towns i think.

right now we're looking to buy and our requirements are super specific, we know exactly what will work and won't work, but i assume we are not your typical buyer.

i also assume that someone from out of state looking for a resort home will find ours appealing because of the specific features--waterfalls, acreage, location, and/or school district.
i'm beginning to think we need (if we use an agent) maybe a second home specialist--unless that eliminates a huge pool of people.

the realtor says if we try to sell by owner and fail, the 'market' will perceive there to be something wrong with the property.
is that accurate in your (collective) opinions?


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RE: what if there are no comps?

Well, I'm part of 'the market' and when houses that I've seen by owner get listed with a realtor, my first thought is not that there's something wrong with the property. My first thought is that the owner was unrealistic either about price or what it takes to successfully market a home.


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RE: what if there are no comps?

I truly hope that realtor misspoke, because if she didn't, she just insulted the skillset of the entire realtor population.

She basically said, it doesn't take a realtor to sell a decent house. It should sell if you list it by owner.

That's what she wants people to believe about her profession?

Meanwhile, I agree with the earlier poster. A house that transitions from by owner to a realtor doesn't say anything other than that the owners were frustrated and decided that utilizing a professional to sell the house IS actually worth the commission.


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RE: what if there are no comps?

"...however the higher end homes here don't come on the market frequently,"

Appraisers will make time/market adjustments if similar homes have not sold recently. If needed, similar homes sold 1 or 2 years ago might have to be used.


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RE: what if there are no comps?

Square foot appraisals are rarely used for single family residential properties.

It is at best a gross metric for anything but commercial space.

Views are not worth anything, tough a bad one can detract (it usually as to be VERY bad, like a stock yard next door).

The same goes for interior floor plans.
They rarely add, but can detract.

An appraiser will adjust recent closed sales on the closest properties they can find.

You might see an adjustment if there is a big mismatch in square footage between a nearby sale and your house, but it is not normally used to determine the base value.

The same can apply to overawe condition, and just about anything else that will alter the value.

Keep in mind the appraiser is trying to estimate what the lender can sell the place for if you default.

Especially after the recent RE fiasco, they tend to go lower rather than higher.
New rules have been put in place to try and limit 'appraisals to purchase offers.'


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RE: what if there are no comps?

The concern I would have about using an appraiser is that because of the market crash, they are now all coming in very conservatively on their values and what they say it's worth will very likely be on the low side.


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RE: what if there are no comps?

We just sold, and were lucky to get an all cash buyer. The one thing we learned this time around was that comps are everything to appraisers, and unless it's all cash, they are the ceiling for your sale.

We ended up about in the same place as appraisal put us (we had been appraised for an equity loan), but it was some inspection issues that put us there. 2nd thing we learned, expect the unexpected.

DD will likely put her house up next year, but we are telling her, wait until you have some good comps in your neighborhood. Her house will almost certainly be sold to a family getting a mortgage, and unless there are comps to support a decent price, don't bother.


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RE: what if there are no comps?

here's a property for sale fifty miles from us which is the closest to what we have here.

http://www.yankeemagazine.com/issues/2010-09/home/houseforsalewaterfall

though i haven't invested in lighting or a wedding pavilion--look at that asking price! that's double what i was hoping to list for.


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RE: what if there are no comps?

"The concern I would have about using an appraiser is that because of the market crash, they are now all coming in very conservatively on their values and what they say it's worth will very likely be on the low side."

And there is not a lot you can do auto it.

Lenders must use an 'arms length' appraiser (they may not select a specific person for the most part any more) to avoid the junk that used to go on.

If a buyer needs a mortgage an appraiser is very likely to be involved.

While jumbo mortgages are 'non-conforming' the lenders often use the same rules as for conforming mortgages.

They are worried about over-valued collateral since they may well hold the note.


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RE: what if there are no comps?

"New rules have been put in place to try to limit 'appraisals to purchase offers.'

I haven't seen this much incorrect "information" given out about the appraisal process since......well, ever.


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RE: what if there are no comps?

fallingwaters,

I have a crazy idea to suggest.

You have a unique, possibly commercial, resort area property that you are currently simply calling home.
You need to attract a unique buyer possibly from far away.

What about creating a blog on your property?

Just weekly posts about every day life there, pictures of the wildlife you see, going to country fairs, local farmers market, the waterfall in different seasons, baking pies from your own apple orchard (or whatever).

Then you visit other similar blogs and leave gracious comments (and your web url!) hoping people will click over to your space and take a look. Not like it's an advertisement, just "this is our life in this beautiful spot." (Which unfortunately we have to sell and this might be our last winter here...blah, blah, blah.)

"How I will miss our darling sparrows...etc!" (Take CUTE photos)

For an example of what I mean check out The Pioneer Woman Cooks. Love her or hate her, she turned a blog about her ranch into big money. Fans find her life idyllic and romantic.

If you attract enough people maybe you'll attract a buyer.

Okay, I told you it was a crazy idea.

:D


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RE: what if there are no comps?

"New rules have been put in place to try to limit 'appraisals to purchase offers.'

"I haven't seen this much incorrect "information" given out about the appraisal process since......well, ever."

So you never heard about shopping appraisers and the many that ALWAYS seemed to come out to match the offer price?

Or the 'arms lenth' rules required for conforming mortgages to prevent appraisers from being swayed by lenders (art least partially to appraise at the offer price)?

What rock have you been living under?

This was part and parcel of the bubble, as houses flipped rapidly to ever increasing appraisals.


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RE: what if there are no comps?

I know more about it than you probably ever will, brickeyee. When we bought a large home in the midst of the previous owner's renovation, I took the appraiser's course to make sure that the ongoing renovation would not price the house completely out of our local market. I wasn't seeking a job, but was recruited from the course for one and worked for several years just before and after the market collapsed. Your assumptions are incorrect on many levels.


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RE: what if there are no comps?

"Your assumptions are incorrect on many levels."

If you are so educated enlighten us.

My wife just sold a few billion of notes for the government on multi family, and is in the process on single family.

There are plenty of us that have read the appraisal guidelines, and even been through a couple times sine the "market collapsed."

As opposed to sitting in a classroom being pumped full of 'knowledge.'


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RE: what if there are no comps?

wow, biochem, what an amazing idea!
i'm so sorry i missed that the first time again, but so glad i came back for a read!
my dd and her friends were just saying i should start a blog, i guess maybe i'll take a gander at it, for kicks and giggles anyway.
anyway i think it's a splendid idea, thanks!


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