Buyer in Watercolor

[scooterbug44]

I happen to know the seller, J & T Investments, LLC, and your math is a bit off on the cost per sf, just a weeeeeeeeeeeeeeeeeeeeeeeeeeee bit. I like the house, though. I could live in the carriage house.

I know they didn't actually build it for that price. ;-)

Just to break even building a 2,600 sqr ft house on a $770,000 lot and selling if for $855,000, you'd have to have a construction cost of $31.70 - about a 1/10th of normal costs, so someone lost some $.

 

[fisher]

I know they didn't actually build it for that price. ;-)

Just to break even building a 2,600 sqr ft house on a $770,000 lot and selling if for $855,000, you'd have to have a construction cost of $31.70 - about a 1/10th of normal costs, so someone lost some $.

Don't forget to back out the commission of $50k or so. They basically got back the cost of the lot and gave the house for free.

 

[livingiSoWal]

This being sold on PropertyFiresale.com, I can give you bit of reasoning to the note.

After speaking with an appraiser I work closely with he said they would not use the sale as a comp because out of the recent activity in WaterColor this doesn?t meet the typical numbers we have been seeing. Most of this is paraphrased but in short that is where it came from.

 

[steyou]

Would this appriaser use this as a comp if another home sold at this price per sq ft? Propertyfire sale.com has nothing to do with it. Are homes that sell at auction exempt from being used as a comp? I think maybe.......... a sale is a sale is a sale.

 

[livingiSoWal]

I agree and from my Realtor? stand point I would go into watercolor and list at that range. Reason being we have another preconstruction home that’s priced already in that range. If more homes go for this price in WC the comp would defiantly be supported, but at this point in time it is not. It is so low, and out of the ordinary, that it wouldn’t be used by an appraiser. That is how it has been explained to me.

 

[Smiling JOe]

I agree and from my Realtor? stand point I would go into watercolor and list at that range. Reason being we have another preconstruction home that?s priced already in that range. If more homes go for this price in WC the comp would defiantly be supported, but at this point in time it is not. It is so low, and out of the ordinary, that it wouldn?t be used by an appraiser. That is how it has been explained to me.

However, whether the sale should be used as a comp is not up to the listing agent who entered the note. That is up to the appraiser and other Realtors who choose to look at it as a potential comp.

Steyou, my guess is that auctioned sales are not typically used as a comp because they are not arms' length transactions. Currently, most are forced sales. However, so many areas don't have enough sold properties to use as comps, so an appraiser may take an auctioned property into consideration to use as a comp.

 

[livingiSoWal]

I agree SJ

 

[scooterbug44]

Ditto.

Why don't auctioned sales count?

They are becoming more prevalent and it's definitely a sale that shows what the property can be sold for.

 

[Smiling JOe]

I'm not saying that all auctions wouldn't be Arms' Length, but in the case of the ones going to auction in today's market, there is typically pressure to sell, thereby making them not Arms' Length transactions, and not useful for comp purposes for appraisals.

 

[SHELLY]

Are lenders going to overlook these "comps" when they put their money on the line....not!

Game over.
.