What country am I worth now?
I go on one leg and put here some specific points that are used to a property in Costa Rica can be evaluated. Currently, this practice tends toward the black magic from the base value of land in Costa Rica in the South Pacific has the right of the cliff with the rest of the world economy.
One of my colleagues in Costa Rica Real Estate has developed a very simple formula for the valuation of real estate: Take what paid for the land and add 25% per year, then you reduce this number to receive a 40% market price today. I found this technique to show ingenuity, is not accuracy so much for these (it would be a subject of much debate), but because he is actually a method to the country that sounds like you value found somewhere brought into the stadium .
The problem is that we do not know where the stadium is today.
We worked more with other real estate here in Costa Rica Southern Pacific region, we are moving towards a more active cooperation on real estate. One of our competitors are invited to look at some houses in Ojochal and we had to, as he asked, “What I’m hearing addressed home worth?”. He said: “You can use the market or in the right market, or lead the market.” To “follow the market would” recognize that others have their prices reduced and so you follow. “Be the market” in the road would remain above or below you, the market now to “lead the market sentiment,” shows that you expect the market to make their way and with new prices, the compelling nature of buyers, we now see, here in the area. In “update” of the market, this means abnormally low price do for a quick sale.
The problem
The old market has left us. He had his annual upward trend, and its summit, and then he just went, he left us standing here, doe-eyed, wondering what to do with the devil. How do you evaluate a property in which there is no structure comparable value in a world from scratch?
I went to an open house a luxury home shows in the hills above Dominical Costa Rica, the other day. What an amazing house! Sales $ 2,700,000 and it is. While I was there I had the novel rather thought struck me that the house was really worth and that the world would probably agree. The problem here in Costa Rica Southern Pacific is that we go into the world market for our compositions for this property. The market for luxury homes in its infancy. There were a few more sales of real estate $ 1,000,000, but at this stage, these sales are a fragile basis for any type of market in the region.
Maybe this is what is happening in emerging markets. You start with only a few outsiders buyers who know the value of something, just by looking. The rest of us come later to find all the necessary data and comparable to help us determine whether it has value or not.
Most sellers have a number in mind that their property is worth. We are well served to ask – what can be had for that price? put into this question, we are really in a position to certain valuation rules, such as challenge, “Do not use the asking price to be comparable. finished only sales. Well, if the prices are all asking you because the market is gone, what happens if in a given region, there is no sale on more than one year and this year the world economy have been emptied, what should you do?
Converse talk – about it.
Method:
We have adopted the “Conversation” method. Rod & I stand (or sit – in office) on land and discuss their virtues and curses.
A summary of the criteria are considered good qualities:
1st View
2nd Access
3rd Amount of land
4th Amount of usable land
5th Privacy
6th Services – roads, water, electricity
7th Airflow
8th Distance from highway
9th That the developer was / is
10th The entire “feel” of property – how beautiful it is?
11th Neighborhood
We have access to the filter:
* “What can you get for that price? And
* “Where are you Mr. Seller? (Hopeless / expect unmotivated / could)
Well, we probably had our land value, based on a historical understanding of how to use the property to be pushed into the market, and the understanding that the property currently has an intrinsic value.
Homes rating:
Once we identified our property, we consider the cost of building the house. This is to make relatively easy, as a home to build now probably run about $ 85.00 per foot depend largely on the finish. At this level, you have peaks of granite and reasonably Nice lighting and plumbing work. Swimming pool and landscaping not included. You can move your price per foot up or down, as now be developed on the foundation or basis of your designs and finishes.
When you taste the raw land, take the cost of building the house, then add shipping concerns, “you reach a point of departure. What is next to hard costs that you will just charge a buyer be willing to give you for not to go in and build a house on his own pay? There is no formula to this problem therefore is part of the sale price, which can be played with.
