By Frank J. Lucco, SRA
When a relocation appraisal professional is asked to offer an opinion of anticipated sales price, the task can be daunting. Specialized training, education and experience typically are key ingredients when generating a credible opinion of value.
Forecasting involves not only the usual consideration of trends, comparable sales and current competitive listings, but also the nuances of the subject property, the neighborhood and the market area in which the property is located.
There can be items that impact the anticipated sales price that are not displayed as an element of comparison on the relocation appraisal form. An internet search might reveal elements that some professionals believe impact price and warrant additional study by the relocation appraisal professional.
Here are some examples of non-traditional elements that relocation appraisal professionals can use in forecasting a property’s anticipated sales price:
- Streetlights. Many consumers may choose to buy in an area with a higher concentration of streetlights, believing they help create safer neighborhoods. While streetlights can be helpful, research has found they alone do not reduce crime.
- Private parks. Living in a private park can add value to a property. Residents of the exclusive Gramercy Park in downtown Manhattan, for example, pay approximately $292,000 more to have access to a gated private park according to one study.
- Modern vs. contemporary architecture. Homeowners can be faced with the decision of choosing between a new home and an older one. Each have their advantages and disadvantages, some of which may impact the value of the property. An older home, for example, may have character, but it also can have smaller closets.
- Street name. The name of the street can have an impact on home values. Research has shown that properties located on female-named streets had higher values than those on male-named streets.
- Internet speed. The availability of high-speed internet service may affect the purchase price of a property. One study indicated that fiber-optic connections can add $5,437 to the price of a $175,000 home.
- Messy neighbors. A property that’s cluttered and poorly kept can reduce the value of neighboring properties by as much as 10 percent.
- Sales agent’s property description. The words used in advertising a property can influence value. For example, research has shown that listings that include the word “unique” sell for 30 to 50 percent less than comparable properties.
Recognizing some of these non-traditional elements can provide exposure to what professionals outside of the appraisal community consider important. Relocation appraisal professionals can elevate their game by understanding, considering and adjusting for such elements that aren’t included on the appraisal form.
Frank J. Lucco, SRA, is a Houston residential real estate appraiser, real estate broker and consultant, with more than 40 years in the valuation profession. He has served as an expert witness, taught courses and seminars for the Appraisal Institute and is a published author. He has worked on more than 800 residential valuation consulting assignments.