FAQ: How Does One Price a Unique Property?

Today, Karen Fiddler, broker-owner of a real estate firm in southern California wrote a great blog post, "When Do You Want To Move? The Science Behind the List Price." In the post she clearly explains how to figure out months of inventory, and how that can best be used to recommend a reasonable list price.

In my area of California, the Peninsula from San Francisco to the Silicon Valley, we have an extreme shortage of inventory, with multiple offers the norm. When a property is unique in some way, finding proper comps to use isn't always possible, so as a listing agent I need to delve further.

A recent listing of mine is a good example. This property, in Belmont, California is a 2-bedroom house per the County Assessor's office. However, it is over 2500 sq.ft. in size, far larger than any 2-bedroom house I could find as a comp--larger in fact than most 3-bedroom homes in our area, and larger than many 4-bedroom homes.

What to do?

Here's what helped me recommend a listing price range:

  • I found that the last sales of similar 2-bedroom homes in this PUD occurred 2 years ago
  • I then researched what the average appreciation has been in that particular pLiving room/dining room, Belmont CAart of Belmont--not the town as a whole, and not San Mateo County; really dig down to specific areas.
  • Applying that appreciation -- roughly 25% -- to the sales prices of two homes that sold 2 years ago, gave me a likely sales price.
  • Knowing the trend in the market today--whether houses are selling at, below or above market enabled me to give my seller advice on a suitable listing range. The seller then chose the list price which fell within that range.

This particular property is currently under contract -- at a price just over what my formula suggested.

Take the time to properly research your market, and then reap the rewards.

--- Come for a visit; Stay for a lifetime!

Lottie Kendall, Realtor®

Today | Sotheby's International Realty

San Carlos, California, 94070

CA BRE#01215160; 650-465-4547

Lottie@LottieKendall.com;

www.LottieKendall.com

www.SFCondosForMe.com

 

 

Comment balloon 12 commentsLottie Kendall • August 23 2015 05:04PM

Comments

As a broker and an appraiser for nearly 45 years, I find your logic and analytical process admirable. Couldn't have made a better suggestion, myself. Exceelent job. Your client should be very happy they hired you to market their home.

Posted by Ken Jones Commercial Real Estate, Automotive & Industrial Real Estate (VRI Realty, Inc.) almost 3 years ago

Hi Ken Jones - many thanks for your comment. While there are many intangibles in pricing, I like to use available data whenever possible and explain to my sellers (and buyers, too) what is likely. I hope the appraiser who will be appraising this particular home agrees

Posted by Lottie Kendall, Serving San Francisco and the Silicon Valley (Today | Sotheby's International Realty) almost 3 years ago

Hey there, Lottie Kendall - I don't want to rain on your parade, because you've done a terrific job in developing and applying your research and analysis regaarding the reasonably probable value of this unique property.

Unfortunately, most appraisers that I've encountered do NOT have the same analytical skills as you've demonstrate. Worse, is that most tend to be more willing to appease their lender-master than to employ the common-sense logic you've demonstrated.

I do, however, hope all turns out well for you and your client.

I'd appreciate if you'd let me know the ending of this situation.

Thanks in advance . . . Ken Jones 

Posted by Ken Jones Commercial Real Estate, Automotive & Industrial Real Estate (VRI Realty, Inc.) almost 3 years ago

That is a good strategy Lottie adn glad that it worked and you got this under contract.

Posted by Debbie Reynolds, Your Dedicated Clarksville TN Real Estate Agent (Platinum Properties) almost 3 years ago

Ken Jones - I'll keep you posted as we move forward with this pending sale.

Debbie Reynolds - working with the appreciation in the area over the last couple of years helped immensely. Thanks for your good wishes.

Posted by Lottie Kendall, Serving San Francisco and the Silicon Valley (Today | Sotheby's International Realty) almost 3 years ago

I am glad you found a buyer for the house quickly. Thanks for sharing the strategy.

Posted by Gita Bantwal, REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel (RE/MAX Centre Realtors) almost 3 years ago

Lottie you're so right, sometimes we list unusual homes that there are no apparent 'comps'. Digging into the details and history is part of the 'investigative' process of which you did a great job on! Do let us know how it all turns out.  My guess is it will be good!

Posted by Anna Banana Kruchten CRB, CRS, Broker, Arizona's Top Banana of Real Estate! (Phoenix Property Shoppe) almost 3 years ago

Good advice Lottie Kendall and you must have been persuasive because it sounds like your seller followed your advice.

Posted by Bob "RealMan" Timm, Bob Timm, Broker Associate, Alliance Real Estate (Alliance Real Estate - Minot) almost 3 years ago

Lottie Kendall Excellent analysis of data, history, appreciation and market savvy.  Even kudos from an appraiser. 

Sometimes I have found that buyers will pay more for those 'unique' properties even if the appraiser & lenders don't agree.

Hope to see follow up post with SOLD details soon.

Posted by Mary Yonkers, Erie/PA Real Estate Instructor (Alan Kells School of Real Estate/Howard Hanna Real Estate) almost 3 years ago

Gita Bantwal - thanks for your comments.

Mary Yonkers and Anna Banana Kruchten - unique properties often appeal to buyers; the challenge might be with pricing or marketing those qualities to the full benefit of the seller

Hi Bob "RealMan" Timm - I didn't need to persuade the seller at all; they chose a lower price all on their own after reviewing my data and recommended pricing range.

Posted by Lottie Kendall, Serving San Francisco and the Silicon Valley (Today | Sotheby's International Realty) almost 3 years ago

Lottie

You know your market . . . . and you know the prices . . . . and the seller had the benefit of you expertise to create a successful outcome.

Good luck and success.

Lou Ludwig

Posted by Lou Ludwig, Designations Earned CRB, CRS, CIPS, GRI, SRES, TRC (Ludwig & Associates) almost 3 years ago

That's the aim, Lou. Thanks for stopping by and for your kind words.

Posted by Lottie Kendall, Serving San Francisco and the Silicon Valley (Today | Sotheby's International Realty) almost 3 years ago

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