My New Outside Blog: Does the History of a Home Affect the Value?

Does the History of a Home Affect the Value?

 

When researching the potential value of a home, one important piece of information is the history.  This critical component to the analysis is often overlooked as we scramble to locate ideal comparable sold properties.

Just as important as sales surrounding the home is the archive search for a glimpse into the past to what has currently taken place.

When providing an analysis for a buyer this should be a key element to provide to your client prior to an offer.  When you are invited for a potential listing opportunity, the history gives us great insight.  This especially holds true if the home has expired and you are seeking to be the next representative.

Past history - if the home has sold through MLS then the information regarding the condition and terms will be available.  In a disclosure state, the past sales history is public information, here in Texas, a non-disclosure state, this makes this task a lot more challenging.  The past sales history will tell us what was paid, you can see if the home has had updates, upgrades, new amenities, & additions since that last time period that may have a positive impact.  Has the home been under contract and then back on market?  Has that happened several times, then maybe there is an issue with the home.

Days on Market - key to understanding the possible position the seller may be in at this time.  If just listed, the seller may not be as negotiable, if the price was just lowered the seller may not be as flexible, for lengthy days on market it tells us one piece of information - we know what the home is not worth.  If there has not been a price adjustment and it has been exposed consistently for a lengthy time, then it most likely is overpriced. 

Research the Past History and it will unlock key information for a well prepared value analysis.

Comment balloon 15 commentsConnie Goodrich • March 15 2011 10:04PM

Comments

Connie....this really is good info.  You see this effecting properties more with fast turns and quick flips than anything else.  But I do like what you put together here!  Thanks

Posted by Larry Bettag, Vice-President of National Production (Cherry Creek Mortgage Illinois Residential Mortgage License LMB #0005759 Cherry Creek Mortgage NMLS #: 3001) over 8 years ago

This is something that comes as natural to me as a criteria search.  I agree, it is a key story teller.  I especially like your comment on knowing what the house is not worth!

Posted by Jayne Esposito, SRES, GREEN (Coldwell Banker ) over 8 years ago

I always look at the history and past sales when working on putting together a Listing or Purchase Agreement, All sorts of fun stuff can be hiding there in plain view to those who look.

Posted by Randy Ostrander, Real Estate Broker, Serving Big Rapids and West Central MI (Lake and Lodge Realty LLC ) over 8 years ago

California is a disclosure state, but sometimes it’s hard as heck to find out about the history of a home, and depending on agent comments in past MLS listings is the wrong way to go here.

Posted by Jim Frimmer, Realtor & CDPE, Mission Valley specialist (HomeSmart Realty West) over 8 years ago

Thanks for visiting and your comments!

Larry - Thank you, I am glad you found some value in my post.  As an appraiser by background, I see that this aspect goes unnoticed at times when agents are working on value opinions.  Just trying to get the word out how important it is.  Appreciate your comments!

Jayne- I use that statement many times when I teach valuation classes.  I tell the class that when you have excessive days on market then the market has spoken very clearly to us .. unfortunately many sellers are not hearing what the buyers are telling them.  Thanks for your visit!

Randy - plain view and easy to obtain sometimes but the key is you just have to look it up .. absolutely right!  Appreciate your remarks!

Jim -California does present some special obstacles.  The statement of not depending on what Realtor comments say holds true here as well.  I have cautioned others that our job as a Realtor is to point out the positives not go to the negatives.  The comments should always be upbeat.  It is when they exercise a little too much liberty with the truth is when a problem arises.  I had one Realtor state that the view of the trees and creek was peaceful.  I went by the home and saw no creek, got out of my car and looked behind the house and there it was .. a large concrete drainage ditch with some trees in the yard across the way, not many.  WOW  that was a far cry from facts.  Appreciate your visit and comments as always!

Posted by Connie Goodrich, CRS ABR (McKinney Realtor)Texas (Keller Williams Realty) over 8 years ago

Connie - What a great post!  I too have on occasion done some research for some of my borrowers on properties they are interested in.  Buyers can also find out if there has ever been any insurance claims filed and/or paid on the property too.  This info when compared to the TDS can reveal some deceitful omissions.

Posted by Donne Knudsen, CalState Realty Services (Los Angeles & Ventura Counties in CA) over 8 years ago

The past history of a home can be key information for buyers.

Your Friend in Charlottesville

Posted by Charles McDonald, REALTOR®, Blogger, Principal Broker®, Owner (Charlottesville Real Estate Solutions) over 8 years ago

GOOD MORNING CONNIE!  I know this is off the topic - but why is Texas a non-disclosure state?  I am just curious!

Posted by Gabrielle Kamahele Rhind, Broker/Owner (KGC Properties LLC, Tucson Property Management & Real Estate) over 8 years ago

Hi Connie,

I had the same question as Gabrielle.  That has to make things very difficult.  What about CLUE reports?  Are they available to you?  Very nice post.  Information is King!

Posted by Cindy Edwards, CRS, GRI, PMN - Northeast Tennessee - 423-677-6677 (RE/MAX Checkmate) over 8 years ago

Gabrielle & Cindy- Texas is just one of very few states that by legislature is non-disclosure on sales price.  You know Texas, we don't like people "gettin" in our business.  We do have seller's disclosure & Insurance CLUE reports but public reporting of sales price is prohibited.  Now when a consumer asks a Realtor to visit we can disclose prices to them and for property tax protest we can provide the information of sales in MLS to the homeowner.  Just can't record for records.  Some homes that elect to not disclose by contract will not have a reported sales price.  It is an obstacle but in a way makes the Realtors in need to assist with valued information. 

Charles - as always I appreciate your consistent visits to my post, thank you!

Donne - you're a very loyal follower as well and I love to tap into your mortgage side of information as well .. great tips and facts! 

Posted by Connie Goodrich, CRS ABR (McKinney Realtor)Texas (Keller Williams Realty) over 8 years ago

Connie...

Another excellent post. A good forensic analysis can indeed tell you a lot about a property. Great advice for buyers and their agents.

Posted by Richard Weisser, Richard Weisser Retired Real Estate Professional (Richard Weisser Realty) over 8 years ago

Richard - great analogy to this process .. I like that!  Thanks for adding this great thought!

Posted by Connie Goodrich, CRS ABR (McKinney Realtor)Texas (Keller Williams Realty) over 8 years ago

Connie. past history is amazingly interesting as the agent digs into it. On a recent home I saw the sellers who had only purchased the home SIX MONTHS prior and had it up for sale AGAIN, asking $20,000 more than they paid for it. I think their listing agent to go along with this was ludicrous but it is not the first time I have been surprised in the field of real estate.

Posted by Gary Woltal, Assoc. Broker Realtor SFR Dallas Ft. Worth (Keller Williams Realty) over 8 years ago

Gary - in that situation I would want to know WHY - what has been done, did they get a heck of a deal, etc.  There can be acceptable reasons for this type of increase but I would call for a solid explanation and research it to validate!  Thanks, as always for your consistent visits to my post and thoughtful comments you leave!

Posted by Connie Goodrich, CRS ABR (McKinney Realtor)Texas (Keller Williams Realty) over 8 years ago

A homes history, or even history of comps & their neighborhoods can tell you a lot.  This is particularly true in custom & semi custom properties. If there is a shortage of good comps from your neighborhood, you want to make sure that the neighborhood you pull comps from is a similar price point neighborhood & not a superior or inferior one.  I have seen appraisals where a semi custom home was compared to home sales in a totally custom gated neighborhood that typically sold for a lot more, with no location adjustment.  Even though there were no current sales in the subject neighborhood in which to copmpare, a history search showed the difference.  When looking only at current sales, you only have a very narrow window of time to find support for sale adjustments, but if you include going back in history, you now have maybe 10 years of time to find the sales you need to show differences.  And although the actual amounts may vary over time, the percentages to the   differences appear to remain similar.

Posted by Craig Chapman, The Value Guy (Call Realty / Access Appraisals) over 8 years ago

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