The SellingColumbus Team of Lori and Greg

Main logo for Selling Columbus Ohio
With over 45 years in the Central Ohio area
"Experience Makes A Difference"

How to Place Value on Waterfront Property – The Sales Comparison Approach

When buying and selling real estate it is to your advantage that you work with both experienced realtors and those who know the local real estate market. It is to your advantage that you work with The Selling Columbus Team. Contact us today and find out what all we can do for you!

Placing a Value on Waterfront Property

        

Waterfront Property is Unique

There are a number of factors which make placing a value on waterfront property unique. Unique means more difficult to determine a value and one must be aware of the various unique factors. In this article we look at one of the most popular methods of placing value on property, the Sales Comparison Approach, and discuss unique factors to be aware of when placing a value on waterfront property.


The Sales Comparison Approach

Without even knowing it people use the sales comparison approach all of the time. You have probably done it yourself, “The neighbor’s house just sold for (fill in the amount), so my house must be worth about (fill in the amount).” On a basic level this is the sales comparison approach. Appraisers get more detailed and perform greater evaluation, but at the heart of it they are doing the same thing. Appraisers look at homes which have recently sold in the area and based on this place values on various features of a property and come to an estimate of value on the home they are appraising. They adjust a home’s value + or - according to a homes amenities or lack of them.

When using the Sales Comparison Approach to determine a value for property one tries to find a Like Property which has recently sold. A Like Property will be one with similar features in both the land where the home is situated (such as both homes are on a private ravine) and in the home itself (such as both homes are a two story with the same number of beds and baths). The more the two homes are alike, the easier it is to determine an estimate of value for the one home based on the recently sold home.


Market Periods

In the ideal situation you find a Like Property in the same neighborhood which has sold in the same market period. Market periods in the central Ohio area are a product of both the weather and school schedule.

  • Winter: This is our slow market period occurring December through March. This is typically the slowest season and sales prices tend to be lower than they would at other times.
  • Spring - early summer: This is our busy market period occurring April through the middle of August . This is typically the busiest season and sale prices are at their peak. Parents want to make a decision prior to school starting if possible.
  • Late summer – fall: This is occurring late August through November. Sales have slowed down as school has started and we head into the Christmas holiday and the start of winter.

Appraisers like to find a Like Property in the same neighborhood which has sold in the past 6 months but will often look at homes sold in the past year. When this is done, the review of past sales may span across market periods.

In central Ohio home sale prices tend to peak at their highest in the Spring—early summer, then decrease or remain level until the following year. This is a factor of supply and demand with demand being high in this Market Period. Market periods are important in determining a value for property as a Like Property which sold last December in the winter will typically have sold for less than what it could have if it were sold the in the following spring-early summer Market Period.

In an area where home prices are increasing, the home values tend to go up as time goes by. In an area where home values are decreasing, the home values tend to go down as time goes by.

When comparing the sale of a Like Property and there is a span across Market Periods, one should consider the effect this has and figure it in appropriately. If home demand is still increasing in the area, then one would expect the value of a Like Property to be increasing the following spring-early summer Market Period.


Variation Between Properties

All homes have variation. This is because no two homes sit in the exact same place. No two homes are exactly the same. For each significant variation a value is placed on the variation and this is used as an adjusting value.

Significant variations between the home being evaluated, referred to as The Subject Property, and the property which sold, referred to as The Comparison Property, is determined by the person performing the valuation and an adjusting value placed on each variation.


Valuation Example

The Subject Property , the home being evaluated for value, is a 3 bedroom, 2 ½ bath two story waterfront home and sits on the west side of the lake. The Comparison Property which recently sold for $850,000 is a 4 bedroom, 3 ½ bath two story waterfront home and a tributary to the lake.

What are the significant variations?

Based on the information in the example, the significant variations in The Subject Property are:

  • Minus 1 bedroom
  • Minus 1 full bathroom
  • Location on west side of lake vs tributary

Next, a value is placed on each significant variation and then added or subtracted from the price at which The Comparison Property was sold. The value placed on each significant variation is based on past sales in the area where the most significant variation between two selling properties is the variation itself. For our example we determine the following value for each significant variation:

  • 1 bedroom = $20,000
  • 1 full bathroom = $15,000
  • Location on west side of lake vs tributary = $80,000


Taking the sales price of The Comparison Property which sold, the value of each significant variation is added or subtracted.


The Comparison Property sales price:   $850,000
The Subject Property has one less bedroom:   - $20,000
The Subject Property has one less full bathroom:   - $15,000
The Subject Property location on west side of lake:  + $80,000
The value of The Subject Property: = $895,000


Unique Factor: No Recent Like Property Sales

The example above is a simple one. What really happens is that waterfront properties typically do not sell all that often. This being the case, finding a Like Property which recently sold can be difficult. In these situations the Market Period of sale becomes a significant variation in determining the property valuation. You may have to look at sales older than a year to find The Comparison Property and then perform the necessary adjustments.

  • Have property values in the area been increasing or decreasing since The Comparison Property sold?
  • How much have values in the area been increasing or decreasing?

These two determinations will aid in coming to an appropriate property valuation when Like Property cannot be found in the same Market Period. See The Central Ohio Real Estate Forecast where we publish the average price increase or decrease in home values each January.


Unique Factor: Location in Relation to the Water (Which Way the Wind Blows)

Have you stood beside a lake and felt the breeze off of the water? It can be moist and chilly depending on the time of year. Have you ever smelled dead fish? Not pleasant!

Waterfront homes may experience these two things depending on where they are located in relation to the water. This is because wind tends to blow from the west to the east. This is a significant variation and one reason Like Property on the western shore of water tends to have higher values and homes on the east shore tend to have lower values.


Unique Factor: Location in Relation to the Sunset. (Where is the Afternoon Sun)

Have you ever been on a friend’s patio or deck in the summer when the sun is in the west and you think, “It is incredibly hot with that sun, I can’t stand it.” Many people have had this reaction and seek homes which do not have their outdoor living space facing west. If your home is one where the outdoor living space faces west you have probably come up with a way to shade your outdoor living space. Homes on the water with outdoor living space facing west have this same issue as well. For this reason, homes which are toward the Western shore of waterfront property are preferred by buyers and thus tend to have higher values.


Summary

Estimating the value of a home is done every day by Realtors and Appraisers. Depending on where the home is located and recent sales activity it may be easier or more difficult to determine a property value. When placing a value on waterfront property it can be more difficult to due to unique significant factors. All of these unique significant factors need to be understood by the person placing a value on waterfront property.

Whether you are selling or buying waterfront property it is important to have an experienced Realtor assisting. The Selling Columbus team has the experience you want having performed over a thousand valuations on central Ohio property. We have been in the central Ohio area over 45 years and we know the market. Contact us when you are thinking of buying or selling property in central Ohio.

Like to find out more about property valuation? For over a decade we have published The Central Ohio Real Estate Forecast. Want to know about the value county Auditors place on property? Read our Insider Report - , The Auditor’s Current Home Value.

Helping Buyers & Sellers  Go to top of page

Buyer's Agent

As a Buyer's agent we look out for your best interests in buying a home. We employ the latest tools to help with finding the home you are looking for and negotiate for you to get it at a price you are happy with.

Seller's Agent

As a Seller's agent we look out for your best interest in selling a home. We identify a target price for your home based on your local market. We assist with staging advice, market your home on more than 20 websites, and negotiate to get you the price you want.

The Buy & Sell Deal

We help with homes for sale in central Ohio and we also help with home purchases. If you need to both sell a home and buy a home, we can help with both and provide you a money saving discount!

Internet Marketing & Technology  Go to top of page

Marketing on Over 20 Internet Sites

We market your home for sale on over 20 internet sites including: Realtor.com, Google, Facebook, and Trulia.

Competitive Edge

We setup a custom website for our clients so they can see how homes in their neighborhood and the surrounding market area are selling, how they are priced, and when new competition comes on the market.

Pictures That Sell

Taking advantage of the latest in digital photography we capture images of your home that do it justice. Your home needs to look its best online so those looking to buy your home find it and find it looking good!

MLS Search  Go to top of page

The #1 Source

Multiple Listing Service (MLS) search is the number one source for available homes and condominiums for sale throughout Columbus and central Ohio. We have direct access to the Columbus Board of Realtors MLS and provide this information to our clients. With direct access there is no delay from the time a home is listed for sale to when we have access to the information.

Always Up To Date

Many other websites rely on obtaining MLS data feeds and can be days behind in making it available. If you are relying on these other websites to find a home then you can miss out should others find the home you want first.

Interactive Map Search

Search for Homes

Lori Swearingen, Team Leader
Coldwell Banker Realty
Realtor
Certified New Home Sales Professional
E-mail:
Mobile:(614) 595-5510

Greg Swearingen
Coldwell Banker Realty
Realtor
Marketing Specialist
E-mail:
Mobile: (614) 595-0468

Member:
CBR Ten Million Dollar Club
OAR President's Sales Club - 2019
OAR President's Sales Club - 2018
OAR President's Sales Club - 2017
OAR President's Sales Club - 2016
OAR President's Sales Club - 2014
OAR President's Sales Club - 2013
OAR President's Sales Club - 2008
OAR President's Sales Club - 2007
OAR President's Sales Club - 2006
OAR President's Sales Club - 2004
OAR President's Sales Club - 2003
OAR President's Sales Club - 2000
OAR President's Sales Club - 1999


Coldwell Banker Realty logo. Each office independently owned and operated Selling Columbus Twitter logo

If you are planning to buy a home or sell a home, let the Selling Columbus team help you. The Selling Columbus team provides customized searching and email notifications when a home comes on the market. You do not have to wait a week for it to show up in a search engine. The Selling Columbus team also provides information on the latest condos in the downtown, Arena District, Short North, German Village, and Brewery District areas. We give you direct access to homes for sale and condos for sale directly from the Columbus Ohio Multiple Listings Services (MLS). Put the experience of the Selling Columbus team to work for you.


SellingColumbus.com
For Columbus area home information and more

Columbus, Ohio
Buy Here * Sell Here * Invest Here
Site last updated 1/4/2024

© SellingColumbus.com
Privacy Policy
Site Designed & Maintained by