Just because a model match sells at a certain level does not necessarily mean it’s a good comp, right? Obviously model match sales are great for comparison because they have the same layout, but there are so many factors why model matches do not always sell at a similar level. This point is particularly evident in the graph below of all MODEL MATCH sales in the Lincoln Crossing neighborhood. Isn’t it amazing to see nearly a 25% difference in price level for the same floor plan?
Here are my observations:
- There is a vast range of prices among model match sales.
- The neighborhood has seen a decline in value over time.
- The range of sales is about $85,000. This range has been seen more or less over the past few years, which is important to note.
- The sales at the top tend to back the greenbelt and have premium upgrades, while the ones at the bottom tend to be short sales. In this neighborhood short sales are tending to sell for less than foreclosures (for this model anyway).
- The appraiser could botch the value if simply using model match short sales as “comps” while ignoring traditional sales at the top. At the same time, there could be money left on the table if the property is marketed against the lowest sales in the neighborhood. Also, the home owner could use all the wrong comps in a tax appeal too, right? This brings up the importance of working with local professionals and sifting through bank-owned, short sales and traditional sales to establish market value.
- Having such a large range of sales means it may prove challenging for online valuation websites like Zillow and Cyberhomes to render a credible value. Granted, a reliable value is not always easy for human appraisers either to be fair, but actually seeing the property and understanding the market makes all the difference.
What stands out to you about the graph? What scenarios have you seen cause a huge difference in price among model match sales?
If you have any questions, or real estate appraisal or property tax appeal needs in the Greater Sacramento Region, contact Lundquist Appraisal by phone 916-595-3735, email, Facebook, Twitter or subscribe to posts by email.