Uncategorized May 7, 2013

Why does valuation seem so difficult?

I found myself yesterday casually acknowledging as normal the 20% difference between the "comps" my client was finding for a property and the price at which I told him it could sell for if handled correctly. It seemed a bit nuts, so I went further, saying that there is a lot of "play" or "fudge" or "variance"….none of those are the exact right word…in real estate pricing. A case can be made for a big delta sometimes. For instance, the $499K home on Mulberry Street….get all that stuff out, clean it, stage it, implement a serious "go-to-market strategy" / product release….and I suggest a list price of $600K, maybe more. Few want to admit that such a range exits. After all, an asset is "worth what it is worth," right? Any appraiser can help us sort that out? No. That's just a construct we use because we need _some_ system; any system. Weather, presentation, promotion, pricing, and good deal doing all make big differences.