Expensive Mistake

When people purchase homes, they are simply purchasing a bundle of real property rights. The reported selling price generally reflects the price paid for these rights. However, they sometimes reflect prices paid for additional rights, other personal and real property, and restrictions on certain rights. If you do not make the proper adjustments in your comparative market analysis, you could make a very expensive mistake.

The purchase price of foreclosed property often reflect the extreme limitations imposed on the buyer in regards to warranties and contingencies and should not be compared to conventional sold property without the necessary adjustments. An owner selling rights conveyed by a quitclaim deed that does not include the total fee simple bundle of rights is not as valuable as a fee simple transaction. Some owners add forms of deed restrictions or have existing leases that encumber the title.

There are times when owners stipulate promises to perform or not to perform certain acts, special financing, contract rights, or other business interest which must be taken into consideration. It is often difficult to find market derived data to support adjustments necessary when using these comparables as a direct comparison. Depending on the available data, these comparables might have to be thrown out or used as secondary support based data.

Any questions or for FREE customized Market Reports, automatic email updates on properties that fit your criteria, or Realtor Referrals, please EMAIL ME or call me at 734-478-9270. -Anwell Tsai