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The Problem with an Appraisal to determine VALUE

July 6, 2011

P R O P E R T Y   S E A R C H

R E S T I V O – H E C H T M A N    T E A M

Value is subjective.  Among other things property value depends on one’s vantage point …   (Buyer, Seller, Realtor, Appraiser,Lender).  What a property is worth to anyone is about as subjective as a piece of artwork  … and will vary according to who the observer is.

The amount an appraiser determines a property to be worth  though is the amount a lender will base their loan amount on. So that’s key if you need financing.  By determining value (based on relevant comparable sales) we can get rough ballpark idea  (a range).  But you really have to look closely at the comps to know where the value lies… for you.   What’s behind the front door (finishes, quality of workmanship, and view) are what add value.  

We are working with buyers who are wanting to purchase a condo in one of Miami’s top luxury condo buildings …  The Gables Club, The Governor House, The Santa Maria, Deering Bay, Grove Isle, or Beacon Harbour.  In each of those buildings, sales prices for 2-3 bedroom units (2,500 – 3,500 square feet) can span from just under $400 a square foot to almost $700 a square foot.    Recent condo sales in Area 41 (Brickell, Coconut Grove, and Coral Gables) of luxury condo sales vary enormously… especially if you expand your search to include units that face a parking lot or butt up to an adjacent building…   Instead of a $1.5 million price tag for a water view , there are units you can find one for half that price … although they may overlook parked cars (as opposed to having waterviews and terraces overlooking the marina). 

In the Gables Club at 60 Edgewater Drive, there are a handful of recently pended and closed sales of 3 bedroom condos that hover around the $1.2 mark.   Some of those  that sold at that price point were lovely.  Others were purchased, then gutted …  the new owners dropping $300,000.00 – $400,000.00 into renovations.  Huge responsibility being an appraiser these days, I would think!  Hopefully you’ll get one who really knows the market and has the right information, because it’s almost impossible to get behind the doors and know what’s there on something that has already CLOSED!

A private sale of a 3 bedroom in the Gables Club closed  for $1.9 million.    PH3D  closed in December 2010 for $600.32 a square foot.  9C in the Gables Club is currently pending sale, priced at just over $1.5 million (and almost $500 per sq ft).  And other currently pending units in the Gables Club include 5D ($387.05 sq ft) and 9C ($493.55 sq ft). 

There are a couple of three bedrooms listed now  in the Gables Club… one at  $1,575,000.00 (11D  at $458.15 sq ft)    and another at $1,595,000.00 (14E for slightly above that).  So what is any one condo unit worth?   It’s worth what you are willing to pay for it, and what the seller is willing to sell it for, and what the lender’s appraiser deems it’s value to be ( if you need their assessment in order to get a mortgage).  It’s worth what the value of the view, and the amenities, and the location, and finishes are to you … and how high a floor it’s on … or isn’t on.

There are a couple of pending sales in the Gables Club, that once they close, will  likely push  “recent relevant sales comparables”  upward … becoming the ‘new benchmark’ for appraisers … as to value.

Between now and then,  as I’m looking through the closed sales of luxury condos in Area 41, the  price per square foot on luxury condo sales in Area 41 varies considerably … ranging from $400 to $700 a square foot:

Back in April 2011 there were three closed sales:

1660 W Glencoe St #202 (Beacon Harbour):  Sold for $1,400,000 ( ($406.50 sq ft)

1643 Brickell Ave #2605 (Santa Maria): Sold for $1,530,000 ($593.02 sq ft)

2627 S Bayshore Drive # 2504 (Grovenor House): Sold for $1,822,500 ($690.34 sq ft)

Currently PENDING SALE, there are unit #1404 in the Grovenor House (listed at $1,690,000 … $600 plus per sq ft/ list price) and 9C in the Gables Club  as well …  which is set to close August for what is reported to be  just over $1.5 million (or just under $500 a square foot). 

Feel free to contact the Restivo Team whether you are buying or selling property …  We look forward to working with  you!  305 793-1365  or email us at restivo.v@ewm.com  or drop us a note here

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