Lesson 3: Residential Real Estate Valuation

August 30, 2018

Review:

• Mortgage 101
• Attendance
• Gary Miller and Casey Edwards visiting on Oct 23.

Presentation:

• Comparable Sales (aka “comps”)
  • Find similar properties recently sold (typically 3)
    • location, size, construction style/materials, etc
  • Calculate price per square foot
  • Apply price per square foot to your property
  • Adjust for key valuation drivers
    • Identify key value differences (e.g., 2-car garage, solar panels, swimming pool, etc), if any
    • Estimate valuation difference and +/- value
• Estimate value of a property listed for sale
  • run through a few examples
  • Zillow, County Assessor, MLS

• Sample Realtor’s MLS driven Comparable Sales Analysis (pdf)

Activity:

• Comparable sales analysis exercise
  • Identify target property
  • Identify 3+ comparable properties, recently sold
  • Calculate Price per SqFt for each comparable property
  • Identify differences between each comparable and the target property (e.g., additional bathroom, finished basement, 3-car garage, etc)
  • Make price adjustments (e.g., +$10k, -$5k) to compensate for differences
  • Calculate an estimated fair market value sales price for target property

Assignment:

• Watch Determining Property Values (YouTube)