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PostPosted: Mon May 03, 2010 12:25 am 
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Here is the kicker,it is a 2 million dollar property. I have been asked to evaluate the anticipated auction price as compared to a 6 to 8 month market exposure. I am a Missouri State Certified RE Appraiser as well. I am located in Southern Missouri. I know the price will effect the number of buyers, but was wanting some more opinions. Thanks in advance.


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PostPosted: Mon May 03, 2010 5:05 am 
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My ratio for cost on the market for unrented (non income producing), real estate is 1% a month. After taxes, mortgage, insurance, maintenance 1% seems to keep coming up. I am a real estate investor, not an appraiser, or broker.

So on a 2 million dollar property it is costing the owner $20,000 a month. 8 months equals $160,000.

This would be my evaluation 8 months of cost as a investor:

Holding cost $160,000

Lost opportunity cost $160,000

Mental stress of a
non-income producing property $100,000

As an investor if you could get me 1.6 million today instead of a chance of 2 million in eight months I would jump on it.

RM


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PostPosted: Mon Aug 02, 2010 5:28 pm 
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If you can sell real estate "on the market" in six to eight months than you know something no one else does. I was told we were in a RE slump. :?


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PostPosted: Wed Nov 17, 2010 11:22 pm 
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Hello
What exactly are you asking?
If you are an auctioneer then you know that an appraisal is only worth as much as a person is willing to pay you for the paper and ink you use to write it.
Your question sounds more like a speculative valuation that an Agent or Realtor would write...
Find out what the reality of the property is worth and have an auction.
We have been getting our clients more at auction than currently listed "comparable" homes and recently sold "comparable" homes...
The reality of the market is what it is...
Live in it, work in it and tell your clients that it is what it will be...
Did they sell you on the auction method at your auction school or was it a real estate school you went to?
When I read words like "on market" it raises an eyebrow as an auctioneer and makes me wonder if this is a Realtor or Agent incognito...
Help us all understand what you are asking by giving us more details...
All the best of Providence.
Skip


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PostPosted: Mon Jun 13, 2011 8:09 am 
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Banji Dry,

I do think that an appraisal will give you an idea. Take the idea (Do the Appraisal) and then cut what you think the value is and cut it in 1/2 for the auction price. In other words, if the house will appraise for $1,600,000 then take 0.5 and that will be your Auction value. Approximately $800,000 if the wend is in the right direction. The buyer will be a cash buyer and really want this home. Plus, this buyer will have had his ear to the tracks and know that the price is going down. So they must purchase it right. (Investor of RE makes his money when he Buys) If you find an End user they may want it more.

Just my $0.02 worth.

Terry Turner
Certified General Appraiser (GA)
Auctioneer / Broker


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PostPosted: Mon Jun 13, 2011 10:32 am 
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Terry Turner wrote:
(Investor of RE makes his money when he Buys)
Could you explain how anyone makes any money by buying?

Jim

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PostPosted: Tue Jun 14, 2011 2:09 pm 
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Location: Ardmore Alabama/Tennessee
Skip
I'm a fellow Auctioneer and I'm a Realtor
Funny thing why I have sold 3 houses for a fellow Auctioneer in the past 8 years.
I know what you are saying but when you talk Auction and Auction only you are putting 90% of my coustomers homeless because they can not purchase at Auction, most do not even have 6 percent to put down
Just Sold 1 house at Auction last month Closed in 20 days
2 houses and 2 small acreage on the MARKET, Closed in 30 days
Both types of sales can work, It's up to the Seller

Thanks
Cornbread

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PostPosted: Tue Jun 14, 2011 5:58 pm 
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Location: Corbin KY
James Ford wrote:
Terry Turner wrote:
(Investor of RE makes his money when he Buys)
Could you explain how anyone makes any money by buying?

Jim


That's a figurative statement I have used for years when buying. I don't think Terry relayed his point all that well, but is saying a smart buyer makes there money when they buy. If you make a great buy on a property (or anything else) it is easy to sell and make money, it's the people who pay to much or expect to much that we can't seem to satisfy.

As for the point of the original post, I think 50% of current market value is WAYYY below auction value for most properties. A properly advertised auction should bring enough serious end user buyers to get the property to a much more fair market value. Even most investors will buy at 70-80% of true value, if the property is normal and doesn't have many obsolesances. I think Ray's way of calculating holding cost is very good, but 1% may actually be a little low when figuring insurance, taxes, utilities and other maintenance such as landscaping & any other normal wear and tear. All of that is important though when a seller is figuring out which way best suites selling there property.

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PostPosted: Wed Jan 18, 2012 11:29 pm 
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Benji:

How would a 50% hair cut from the price you were trying to get for this property in 2008 sound today?

Probably a lot better than the 2012 Present Cash Market value.

Did this house ever sell?

Auction or MLS?

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