I previewed the following home (MLS and address not listed to protect the owner and the agent) sometime last year. The owner greeted and me and conducted the showing/walk about . He is a pleasant gentleman, obviously proud of his work. The home is in a gorgeous setting as is typical of many properties that are located in flood zones other than B, C, and X. As typical for non subdivision Mississippi, the area is mixed with types and quality of homes. This home sits far back from the road giving one a feeling of seclusion.
The drive down the street where the home is located more than likely had a negative effect on the appeal of the property. The home is a 10 year old rambling ranch style.
When I spoke with the owner I asked him about flooding as many people after Katrina did not want to be exposed to any threat of water. I had no reason to have done DO Diligence at that time. So, I did not use my GEOJET. The only time he faltered a bit was when he said that flood insurance is required, though his property did not flood during Katrina and had never flooded.
It is not unusual for homes in this area to be on the market for a year or longer before selling (according to MLS history search).
I pulled the following MLS history on this home. I am still confused about how a home can be closed 1 day and listed active the next day. I don't think it was operator error as the close price was listed substantially below the list price. --see below--.
Original List: 09/06/$274, 900 Reduced: 12/06/$269,500 Expired: 07/07
Re-Listed: 07/05/2007/$258,000 Closed:07/23/07/$225,000 Active: 07/24/07/$258,000
Withdrawn: 08/03/07$258,000
(I am including the flood map because I have a suspicion it may have had something to do with how things turned out for this seller). Cooperating MLS commission: 2.5%
Zone AE and A1-A30
Areas with a 1% annual chance of flooding and a 26% chance of flooding over the life of a 30-year mortgage. In most instances, base flood elevations derived from detailed analyses are shown at selected intervals within these zones.
The MLS converted to FSBO Owner says:
Original Price: $263, 800
Reduced: 15, 800 IF NO REALISTATE (That is the spelling on his flier. I assume he meant REALTOR)
New Price: $248, 000 IF SOLD BY OWNER
GREAT SAVINGS OF $15, 800
So, if we do the math he is assuming all REALTOR transactions REquire a 6% commission. Now if one of us said something like that, we could be disciplined and/or fined.
This is a circumstance where I would not say it was the agent's fault. Her profile indicated:
The Agent lived on the beautiful Gulf Coast for 29 years.
- College Graduate
- Agent was raised in the Real Estate business.
- The Agent was one of the 2004 Mississippi Gulf Coast Board of Realtors Top Producers, and received a bronze level award.
- She has a family and was mentored by her succcessful REALTOR/mother
- The agent has a positive reputation
(I always feel a bit intimidated by agents who advertise "I grew up here... I moved here right before Katrina)
Below is a property that closed in August, 07. The two properties had many similarities, i.e., 10 yrs on both, sq ftg almost matched, #acres almost matched. The main differences: the property below had an inground pool as compared to the property above. The property below also had a 1600 sf work shop with 4 rolling doors. In my opinion the decor of the above property was more appealing. The style of the 2nd property is acadian. It was on the market 219 days Listed at $269K and closed at $265K. Cooperating MLS Commission 3.0%. Listed by Broker, sold by agent of same firm.
Zones B, C, and X
Areas outside the 1-percent annual chance floodplain, areas of 1% annual chance sheet flow flooding where average depths are less than 1 foot, areas of 1% annual chance stream flooding where the contributing drainage area is less than 1 square mile, or areas protected from the 1% annual chance flood by levees. No Base Flood Elevations or depths are shown within this zone. Insurance purchase is not required in these zones.
This began as an easy blog. I was simply going to share the For Sale By Owner's selling strategy. Then when I began looking at it, I was compelled to dig a little deeper. I don't really have a conclusion, but questions. I would appreciate feedback as I spent so much time looking at these 2 properties that I hope to convert the time to "educational or research investment". So, here goes:
Can you compare properties in close radius but different flood zones? If so, what formula would you use?
If you have a residential lot that is partially wetland, how do you handle valuation? (Example: 15 acres with 2/3 wetland. The land is beautiful.)
What would the value difference be between an above ground pool well disguised by a built up deck compared to an inground pool?
How do you value a metal workshop garage w/uts, rolling doors?
What do you think of the FSBO advertising strategy?
(Supporting information from Gulf Coast MLS search and floodsmart.gov)
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Hi Suzi, some of this I think would require the SWAG method of comparables. :) We have the flood zone issue here...usually SWAG pricing.
Above ground pool issue, I don't think an appraiser would add much value for that. Another SWAG issue.
No idea about the shed.
The FSBO...a little loco I think. :)
If you don't know SWAG... Scientific Wild A$& Guess.