Centex, that is!

Remember last year when they were going to do a deal that would give Warrenton $22 million and they would build homes in a 55+ community with prices at $900K?! At the time I speculated that the world had truly gone beserk if they believed there was a big market of retirees looking for $900K homes in which to retire. At least I was willing to be they weren't looking for those homes in Warrenton, Virginia!

And, eventually, the deal did fall apart. Centex executives no doubt came to their senses!

But a deal has been put back together. And while the money Centex is contributing is now down to $15 million, I suspect this is a smarter deal all around and much more likely to actually come to fruition.

I did notice, though, that there's no mention of the price of the homes that will supposedly be built here. I'm guessing they won't be anywhere near $900K!

What do you think?!

We've talked a little bit in the past about appraisals and we've talked about the use of comparables when deciding on a listing price. But I had something a little out of the ordinary come up this week and thought it might be of interest to everyone.

An agent called to say she was writing an offer on one of my listings in Warrenton. She also told me she was using the last settled comp (comparable) in that subdivision as a basis for the offer price. Now that seems perfectly reasonable. That's especially true given that settlement on this particular home occurred only about a week ago.

However, there are special circumstances at play here that definitely warrant a closer look. This particular unit is reasonably similar to my listing. However, it was never actually for sale in the multiple listing service. It was entered into the MLS solely for comparison purposes. A good clue that this is the case is when something is entered into the MLS as "sold" with zero days on the market. I called the agent for a little more background because there was something else unusual here. Generally if it's never really been for sale and is entered only for comparison purposes the List Price and the Sold Price are the same. However in this instance there was about $55K difference between them.

Basically, the home had been owned by a foundation that was liquidating assets. A private buyer became aware that this home was going to be sold and approached the agent about buying the property without it going on the market. The foundation was willing to take substantially less cash for a quick, cash sale with the property sold as is.

Now, I am a little concerned about this because certainly this will come up when an appraisal is done on my listing. But part of the appraisal process says that in order to compare "like properties" they should both have been exposed to the full competitive market. Clearly that didn't happen with this unit. And, I'll make sure I make the appraiser aware of this.

I also made the agent writing the offer aware of the background so that she understood the flaws with basing her offer solely on this comparable.

It's too soon to tell what the outcome will be as we haven't yet received the offer. But sometimes a comparable isn't really comparable!