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Back to old fashioned math and loving it!

By Kris Wales

Real Estate Agent with Keller Williams Realty - Lakeside Market Center

November 20, 2007 02:58 PM

Appraisals I'm old. I'm not ashamed to admit it. When I was in elementary school there weren't hand held calculators. We learned math the old fashioned way. Years later there was "new" math introduced into the schools. My kids understood the teaching better than I did. Thankfully they didn't need help with their homework.

During the real estate "boom" in Macomb County I saw quite a bit of new math methods being used. Homes that sold for $100,000 would have neighboring homes sell for $120,000 just a few weeks later. What shocked me (and my buyer clients!) even more was the fact that the appraisals would hold up and not be questioned. Frankly, I could never figure out how a 4 or 5 neighboring homes that were cookie cutter homes could be used in support of the $120,000 sale just a few weeks later. And it went on from there, the $120,000 sale justified the new $130,000 sales price. New math and all..

Guess what folks? We're back to old fashioned math and I'm loving it! I can understand it, I can work with it, I can justify it to my buyer clients and seller clients.

Today, if I see this math equation I am happy:

     Home A sold for $100,000

     Home B sold for $102,000

     Home C sold for $98,000

     Home D sold for $101,000

Why am I happy? Because I know that with old fashioned math your cookie cutter home is worth approximately $100,000 to a new buyer.

No haggling - no hard feelings.

With old fashioned math back we know exactly what your home is worth in the marketplace. The bank appraisers know it. I bet they liked old fashioned math better also.

©2007 Kris Wales Macomb county real estate     Search Metro Detroit homes for sale

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Christina Bennani-Persechini

Keller Williams Realty Boston North West - Lexington, MA

Realtor - The House For You

Good post, these days it is easier to price things, be the best value on them market.

Nov 21, 2007 12:36 AM

Tom Burris

NMLS# 335055 - Baton Rouge, LA

Texas/Louisiana Mortgage Pro - 13 YRS Experience

I have seen some real doozies. Comps ignored, comps far away..... all to 'get the value'

Banks should have been reviewing appraisals all along

Nov 21, 2007 12:49 AM

SHAUN WREN

LICENSE IS NOT PLACED - Lakeland, FL

I just closed one that the investor wanted comps within the last 2-3 months.

Nov 21, 2007 01:31 AM

Kim Peasley-Parker

AgentOwned Realty, Heritage Group, Inc. - Sumter, SC

I like the old math too. Much easier to justify when working with buyers and sellers. But we still have agents who use new math to get listings.

Nov 21, 2007 02:25 AM

Lane Bailey

Century 21 Results Realty - Suwanee, GA

Realtor & Car Guy

Boy, I wish it were that easy here. Of course, part of that is because we don't seem to have too many cookie cutters...

Nov 21, 2007 02:26 AM

Allen C. Wright

RealtyU - Aliso Viejo, CA

NS, AHS, REPS

Great commentary on the industry during the last several years. Always confused me too.

Nov 21, 2007 02:49 AM

Kris Wales

Keller Williams Realty - Lakeside Market Center - Macomb, MI

Real Estate Blog & Homes for Sale search site, Macomb County MI

Missy: Thanks! I hope your listing appointment went well for you and your prospective clients.

Al: The same to you and yours :-) Try to get some R & R in.

Christina: I agree. Thanks so much for stopping in.

Tom: I couldn't figure out why the banks weren't doing that before this "crisis". Makes no sense.

Shaun: I certainly hope there were some comparables for that time period for you. Here, I only look back 6 months. 3 if there are enough to work with.

Nov 21, 2007 04:18 AM

Kris Wales

Keller Williams Realty - Lakeside Market Center - Macomb, MI

Real Estate Blog & Homes for Sale search site, Macomb County MI

Kim: I know, I"m still seeing it here also. They really are doing a disservice to their clients.

Lane: I forget which part of the country you are in. Now I'll have to jog over to your blog and investigate :-)

Allen: Thanks. Confusion doesn't help matters at all.

Nov 21, 2007 04:20 AM

Josette Skilling

Keller Williams Capital Properties - Bethesda, MD

Ah, but buyers like to practice their own version of new math as well called fractions. Like offering a fraction of that $100,000 price instead of understanding that the worth was fairly evident when laid out as you did!

Nov 21, 2007 04:26 AM

Diane Aurit

LKN Realty, LLC - Mooresville, NC

Lake Norman Real Estate

Great point, although in some markets the math is still very challenging. It will be nice when things level out everywhere. Happy Thanksgiving Kris and thanks for all of your support!

Nov 21, 2007 04:38 AM

Abe Do

Olympia, WA

Well at least you were able to focus on the positive aspect!! Thanks!!

Nov 21, 2007 04:51 AM

Norma Toering Broker for Palos Verdes and Beach Cities

Charlemagne International Properties - Rancho Palos Verdes, CA

Palos Verdes Luxury Homes in L.A.

Maybe the lesson learned is that greed is not so good, and slow and steady is the winner in most instances.

Nov 21, 2007 06:04 AM

Kris Wales

Keller Williams Realty - Lakeside Market Center - Macomb, MI

Real Estate Blog & Homes for Sale search site, Macomb County MI

Josette: There is that :-) Yes, fractions are playing a part of things now with buyers. It's hard to blame then though with all they are reading about "buyers market".

Diane: Happy Thanksgiving to you and your family also Diane. It's been a pleasure getting to know you.

Ryan: I try to not allow myself to do anything but focus on the positive, thanks Ryan.

Rolling Hills Homes: Agreed. Do you think history will teach the lesson or will it be ignored in future generations?

Nov 21, 2007 06:19 AM

Trevor Ainsworth

Century 21 Jack Associates - Burlington, VT

Burlington Vermont Real Estate

what a great post. itr kind of reminds me of george bushs 'fuzzy math" thanks, trevor

Nov 21, 2007 09:23 AM

"The Lovely Wife" The One And Only TLW.

President-Tutas Towne Realty, Inc. - Kissimmee, FL

Kris...

Some would say it's old school.

However, I say ... Since when is Math old school? :)

Have a great gobbling day :)

TLW...ROAR!

Nov 21, 2007 10:19 AM

Gary White~Grand Rapids Home Selling Pro Call: 616-821-9375

Flexit Realty "Flexible Home Selling Solutions" - Grand Rapids, MI

Real Estate Services You can Trust!

Congrats on the feature Kris.....sometimes the good old fashion reasoning will whip a calculator every-time. Nice post.

Nov 21, 2007 01:02 PM

Bob & Carolin Benjamin

Benjamin Realty LLC - Gold Canyon, AZ

East Phoenix Arizona Homes

Good post. Happy Thanksgiving.

Nov 21, 2007 03:52 PM

Kris Wales

Keller Williams Realty - Lakeside Market Center - Macomb, MI

Real Estate Blog & Homes for Sale search site, Macomb County MI

Trevor: You made me laugh with that comment, thank you :-) There could be some comparisons...

TLW: Give me "old school" anytime :-) A very happy day to you and yours - may it be filled with peace and joy.

Gary: Thank you. I hope your day is wonderful, Happy Thanksgiving.

Bob & Carolyn: And to you both also!

Nov 21, 2007 09:05 PM

David & Lisa Webber

RE/MAX Executive - Crofton, MD

www.webberteam.com

Yes, it's more like that around here also, but I'm sure my buyers would *love* to see a $100,000 house!

Nov 22, 2007 04:25 AM

Kris Wales

Keller Williams Realty - Lakeside Market Center - Macomb, MI

Real Estate Blog & Homes for Sale search site, Macomb County MI

David & Lisa: I'm curious now as to what area of the country you are in (where there aren't any $100,000 homes!) I'll have to jog on over and see for myself :-)

Nov 22, 2007 09:16 PM