An inside look at the residential real estate market in Southeast Texas including: the hottest neighborhoods, proven home selling strategies, home buying and negotiating tactics, median prices by neighborhood, average days homes are on the market, and professional advice on how to get the best deal when buying or selling a home.

Thanks to Hurricane Harvey. Flooded and Gutted Homes added to Southeast Texas MLS.
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Establishing the Value of Flooded and Gutted Homes Post Hurricane Harvey

I've been posting about "as is value" and how to determine the value of a flooded and gutted home lately because so many people are considering this option.  Now we have the first two homes under contract.  Not closed yet.  Just under contract but this starts to establish a market value for flooded and gutted homes.  Data from the Southeast Texas MLS

F&G under contract

 

This is information from an earlier post.  I’m sharing it again. 

I have been asked to provide a formula on how to calculate a price on selling a flood damaged home when the seller wants to sell “as is” to an investor.

Here are some parameters to consider when making a calculation.  Keep in mind, the market value for this category of home has yet to be established.  (Is only beginning to be established)
 
-Start with the value of the home prior to the flood.
-Discount that price by 10%-20% to account for stigma due to the flood.  The extent of the damage to the house/neighborhood will determine how much to discount.
-Subtract the estimated repair costs.
-Subtract 20% to account for profit.  (20% of the anticipated repaired sales price).
 
Example:
 
Pre Flood Value –            $200,0000
15% Stigma Discount –     $30,000
After repair value –         $170,000
 
Repair Costs –                     $60,000
20% Investor Profit –         $34,000
 
“As Is” Value -                 $76,000
 
This information should be taken with a healthy dose of salt.  Stigma, repair costs, and investor profit expectations are all moving targets.  
 

If you would like help determining the market value of your home please contact me.  There is no cost for the analysis. 

#409Sold

Sincerely,

Diane

 

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