Some grade school math coming from a few different directions and a feel for the ineffable, here is how I can tell my buyers how much the home is REALLY worth.
Step 1. I Establish a price range based on price per square foot.
Here is where I differ from many other agents. I start with price per square foot from a few different directions and a few different averages. If I have a rear 2nd floor 2 bedroom on a certain block of Back Bay or a single family on a certain street in Lexington or a condo in a large building in Quincy there are a myriad of ways to quantify.
For example, lets say I have an average renovation of a third floor one bedroom front facing on Commonwealth Avenue. I'm looking for three averages. One would of course be all third floor front facing Commonwealth Avenue condos sold in the last 12 months or so. For the second average I will pull up all one bedrooms that have the same location cache', like front facing on Marlborough, Beacon or the side streets of Back Bay proper. For the third average I will pull up raw numbers for square footage in Back Bay that match the renovation level of the property in question. If parking is involved I add or subtract depending if the unit has it and which block the parking is on. If its near Exeter and Commonwealth the parking is worth 100-150K. If its up near Charlesgate it may be worth 75K only 4 or 5 blocks away.
So now I take an average of those three averages and I have a good starting number.
Step 2. A bit more subjective.
The next step tends to expand the range of values because some of these issues are ineffable and tough to quantify. So much so that I discuss these with my client. How much is that great view worth? Who says you can't put a number on it. Take a stab at it. After all my buyers have seen the entire inventory if they are following my direction (as a Buyers Agent one of my basic rules is to show EVERYTHING appropriate) so they can probably tell me what they think of the view and we find agreement at say $50 per square foot above the average we established in step1. With me so far?
Step 3. The other ineffables.
Once I have looked CLOSELY AT THE PHOTOS and I'm done READING THE REMARKS of the sold units here are the other modifiers to the number established in Step 1 and Step 2.
Condition of Common Areas
How well the entire building as well as the unit does during inspection
Cost of ownership, this includes condos fees and taxes which can both be too high for many reasons
All of the above is going to take me 30 minutes but now I can give my buyer a close range of fair market value. So as in the case of the front facing 1 bedroom on Commonwealth Avenue my range may be stated like 420K to 440K. Once the negotiations get below 440K I can relax a bit as there is no danger of my buyer overpaying for the property. If the seller doesn't go low enough, I will often advise my buyer to walk away because as we all know "You don't make money in real estate when you sell, you make money in real estate when you BUY.
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