Telling the story of the property with N$mbers!
We provide Real Estate Expert Witness Consultation for Bankruptcy, Divorce and other Real Estate-related Litigation cases, which also includes Appraisal Review (if applicable).
We are both dependable and responsive.
With our 40+ years of combined real estate AND comprehensive accounting experience, we are more than Competent in preparing WELL-DOCUMENTED property valuations and are in compliance with the STANDARD OF PRACTICE 11-1 of National Association of REALTORS® (NAR) Code of Ethics. We only evaluate real estate for which we have both the experience with and knowledge of the subject property’s segment of the market and how it behaves.
As part of our due diligence, we study the aspects of the current or projected Economic Climate such as interest rates, the ease or difficulty of obtaining a mortgage, employment rates and etc. since these are the factors that can affect the decisions and capabilities of both sellers and buyers.
What helps us provide CONCRETE data is consulting relevant resources in forming an opinion about property price, such as: the MLS, REALTORS® Property Resource’s “Realtors Valuation Model (“RVM”), Fannie Mae’s “Selling Guide’s Selection of Comparable Sales”, Freddie Mac (for economic and housing research), Joint Center for Housing Studies of Harvard University (for housing policies), S&P/Case-Shiller Home Price Indices (to track changes in the value of residential real estate, BankRate and public records. Furthermore, if we require additional data or are required to provide services outside our field of competency, we engage the assistance of one that is competent in that field and disclose that person’s specific contribution.
We perform Appraisal Assessments and provide fact-based reconciliations to support any inaccuracies and/or Red Flags that that indicate a flawed appraisal. We also prepare Appraisal Packages to assist Appraisers in fulfilling their role to present to lenders an accurate and credible opinion of the Market Value of the Subject Property.
Let’s Talk N$mbers!
We make Real Estate Statistics Meaningful while ensuring the numbers are in the context of our client’s goals!
By the N$mbers Lionesses are all about telling the story of the property with numbers. We are conscientious in aligning our pricing recommendations as close as possible to a formal and accurate appraisal of the property. We are diligent in keeping abreast of market conditions to determine the Absorption Rate, which helps us to more precisely determine a Pricing Strategy that can successfully market the property in a given area. We further utilize these adjustment principles that are supported by market data:
SBA = If the Subject is Better, Add to the value of the comp.
CBS = If the Comp is Better, Subtract from the value of the comp.
THERE IS NO “ONE SIZE FITS ALL” COMPARATIVE MARKET ANALYSIS.
We use “Pricing Psychology“ and the fundamental principle of “Highest and Best Use” (Physically possible, Legally permissible, Economically feasible, Maximally productive)* in order to Not Only paint a picture that accurately represents the financial reality of the subject property at the time we perform our comprehensive valuation, but to support the HIGHEST PRESENT VALUE. The factors we consider in our valuations with the goal of obtaining “Optimal Similarity to the Subject Property” are:
– Date of Sale
– Number of bedrooms and baths
– Floor plan or style
– Garage size
– Potential negatives (e.g. busy street, near business/industrial district, airport).
– Any potential income
– The most current zoning ordinances
– Proximity to a particular school district, public transportation, or an industrial area
– Any unique attributes or differences
– Identify and adjust for inaccurate or missing information, for significant personal property included in sale, for non-Arm’s Length transactions, or for abnormal/distressed sale (e.g. Short Sale or REO could sell at 15-20% discount)
– Calculate the margin of error of any conflicting data used such as Zillow’s Automated Valuation Model (AVM)
– Apply the appropriate method of adjusting the comparable, either:
a. Market-Based: the market value of the item being adjusted
b. Cost-Based: the actual cost of the item being adjusted
The Paired-Sales Analysis: comparing a specific feature across multiple comparable transactions to isolate its effect on price, then
Adjusting for Market Expectations of what prospective buyers presume are standard features of properties in a specific market, then
If the market is competitive, we would further apply the principle of Substitution of what buyers would be willing to pay more or less for a feature and make the adjustments accordingly.
We Interpret NAR’s Article 11 of the REALTORS® Code of Ethics as it relates to pricing property. We present to our client’s a fact-based and objective assessment of the subject property.
When we prepare our valuations of real estate, we do attest, per the REALTORS® Code of Ethics, that we are:
“knowledgeable about the type of property being valued, have access to the information and resources necessary to formulate an accurate opinion, and are familiar with the area where the subject property is located, unless lack of any of these is disclosed to the party requesting the opinion in advance.”
We include in our valuation, per the REALTORS® Code of Ethics:
– identification of the subject property
– date prepared
– defined value or price
– limiting conditions, including statements of purpose(s) and intended user(s).
– any present or contemplated interest, including the possibility of representing the seller/landlord or buyers/tenants.
– basis for the opinion, including applicable market data.
– if the opinion is not an appraisal, a statement to that effect.
– disclosure of whether and when a physical inspection of the property’s exterior was conducted.
– disclosure of whether and when physical inspection of the property’s interior was conducted.
– disclosure of whether the REALTOR® has any conflicts of interest (Amended 1/14).
Our goal is to avoid not only our client’s real estate asset from languishing on the market, but also the accompanying stress and disruption it causes.
In addition, we strive to protect our clients from both undervaluing their real estate and overvaluing their home (the property may not appraise for the high offer price) .
“WHAT’S PAST IS PROLOGUE” (William Shakespeare)
meaning that previous events set the stage for current situations.
Our Comprehensive Evaluation consists of our performing a CMA (Comparative Market Analysis) in which we evaluate the subject property by using Comparables of recently sold properties that are substantially similar to the subject and in the same market.
We also review current listed properties that could be considered Competition to impress upon the Seller what he or she is up against. We make the necessary Adjustments in order to arrive at the indicated value of the subject property.
We are conscious of reviewing comparable properties in the same neighborhood, because prices vary considerably in different neighborhoods despite their close proximity whether they are in the same city and share the same zip code. (Example: Venice homes east of Lincoln are considerably cheaper than homes west of Lincoln due partly to proximity to the beach.)
We also perform Cost Valuation. This represents the total amount spent to acquire or build a property and whether it has a historic quality which doesn’t vary over time.
We determine Market Value and/or Fair Market Value – the most likely price a property should sell for in a competitive and open market where the property was exposed for a reasonable time.
We also take into account whether the subject property is in harmony with its surroundings, because this creates the maximum value. When the property does not conform to the existing neighborhood’s standards – similar design, construction, size and age – its value decreases.
Contribution is also taken into account during the valuation process. The value of any part of a property is measured by its effect on the value as a whole. For example, when comparing a three-bedroom home with one bath compared to a three-bedroom home with two baths, the additional bathroom will add significant value to the second property. If the same property has three baths, the value of the third would not be as great as the value of the second. Another principle of Contribution is apparent in the difference between the value of a swimming pool and the value of an updated kitchen – the updated features would add value whereas the pool might not.
We also take into consideration the principle of Regression, which is when a higher-priced property is worth less if it is located among lower-priced properties.
The opposite of Regression is Progression, which is the principle that the value of an inferior property is enhanced if surrounded by properties of greater value.
We also take into account Substitution, which sets the maximum value of a property as what it would cost to purchase an equal property.
A common approach that real estate agents use is the Sales Comparison approach, which is one of the three common valuation techniques to determine market value. Appraisers use this approach along with the Cost Approach, and, if applicable, the Income Approach. In the Sales Approach, the subject property is compared to recently sold comparable properties and adjustments are made for the differences between the subject and each comparable.
We By The N$mbers Lionesses, provide clarifying commentary on comparables to explain the logic behind our analysis.
*By using the Highest and Best Use principle to price a dual-zoned property, our Lioness Taunee was able to sell a property for $400,000 over comparables!
Lioness Taunee English created a National Association of Realtors® approved Code of Ethics Entertaining Continuing Education course called “Real Estate Court – The People’s Court for Agents“