Real estate owned or REO is a class of property owned by a lender—typically a bank, government agency, or government loan insurer—after an unsuccessful sale at a foreclosure auction. A foreclosing beneficiary will typically set the opening bid at a foreclosure auction for at least the outstanding loan amount.
A sales comparison approach identifies the location of the property and whether it has panoramic views, the amount of street traffic around the property and the noise this traffic generates, where the property is located in the neighbourhood (like a cul-de-sac), and whether there are parks or recreation areas close to a property.
The sales comparison approach also takes into account the sales prices over the last six months (later prices tend to carry more weight), physical features of the property (size of the garage, pool, and patios and porches), the condition of the property, the number and size of the rooms, the floor plan, and financing options.
The cost approach considers the price of the land and adds the cost of building the structures on top of the price of the land. Depreciation is then subtracted. This approach is often used for public properties (schools, churches, etc.) The reason for this approach when applied to these types of structures is because it is more useful than the sales comparison model in these cases. It can often be difficult to find comparable properties on the market for some properties so this approach is a more precise method when the comparison model doesn’t have enough similar properties to give a good estimate.
The income capitalization approach values the property by the income that it can potentially generate. Naturally, this means apartments, various kinds of businesses, office buildings, and shopping malls. This approach can be a bit technical, but our methodology is shaped around performing market studies to determine what the property can earn, understand the effective gross income by subtracting vacancy rate and rent loss (also found in-depth market studies), the net operating income based on the annual operating expenses, and the finally, the capitalization rate which is the return rate that other investors are receiving in a similar market.
Besides property valuation, we also offer a wide variety of options in account management. We will keep track of your initial task submissions, occupancy checks for the property, assigning the inspection tasks (interior and exterior photography and the subsequent follow-up), consistent communication with the portals, providing marketing photos and their submission, create the marketing description for the property, providing you with monthly status reports, take care of all the marketing for the property, submitting offers on the behalf of the agent, and follow up with the buyers.