5 Quick Steps to Pricing a Landed Home | Singapore Property News

5 Quick Steps to Pricing a Landed Home

26 Mar 2015
How To

X-Value For Landed Homes

Unlike condos and HDB flats, landed homes come in many different shapes and sizes and land configurations. 

As a result, it’s technically more difficult to value and price a landed home than a condo or flat. 

In real estate, the most common method for pricing a home is known as comparable market analysis or CMA.

Using the CMA methodology, X-Value™ algorithms take your home’s characteristics and look through all the real-time transactions in the market in order to identify the purchase prices of similar homes. 

The computer benchmarks your home against the similar homes and uses regression analysis techniques to calculate a unique market value for your individual unit. 

Based on the X-Value, you and your agent can decide whether your home’s unique characteristics (e.g., a new kitchen) warrant listing your home at, above or below the X-Value.

For example, if the X-Value is $750,000 and you have a home that stands out from the similar homes used in the computerized CMA analysis, then you might price your home at $775,000.

Given SRX Property has the most comprehensive property database in the market, X-Value algorithms have little problem finding recent transactions for similar condos and HDB flats.  

The reason is that there are a large number of non-landed transactions each month.  

In addition, it’s easy for a computer to collect real-time data, quantify a flat in terms of location, building, floor, size, age and tenure, and, then find good matching comparables.  By their nature, flats are very similar to each other.

In contrast, it’s tricky to find relevant and recent comparables when pricing a landed home.

There are four technical reason it’s difficult to find good comparable transactions for a landed home as compared to that of a condo or HDB.

First, there are fewer landed transactions compared to that of non-landed homes.

For example, according to SRX Property, there were only 957 landed transactions in 2014.  In contrast, there were 16,111 resale transactions in HDB and 12,571 new and resale transactions in private condos.

Fewer transactions mean less comparables from which to choose.

Second, there are more property characteristics, such as Land Tenure and Strata land types, to consider when choosing comparables for landed home.  (Strata houses are commonly referred to as cluster houses.)

Third, URA transactions do not capture some property characteristics that are essential to pricing a landed home, including built-in size, age of property and land boundaries. 

Fourth, it’s very difficult for a person, without the aid of a computer, to recognize appropriate comparables from raw data.  It’s necessary to use geospatial applications that can show similar transactions on nearby streets.

As a result, if you don’t use geospatial applications, it’s easy to miss relevant, nearby transactions and incorrectly price a landed home.

The good news is Big Data and technology have solved these four challenges.   Now it’s possible for X-Value algorithms to price landed homes with speed, accuracy, and integrity.

In essence, the computer digitally reconstructs a landed home in virtual 3D. 

Drawing on multiple sources of public and private data, the computer can plot the land boundaries, including the different lengths and angles of the plot. 

The algorthims virtually recreate the building to include the number of floors, gross floor area (GFA), landed property type, and tenure.  

The system does a radial search from the property's location to find similar homes that have been transacted nearby.

During the search, the computer’s looking for comparable homes based on many factors like location, property type, land size, GFA, land type, land tenure, property age and contract date.

Once the computer detects the comparables, it runs regression analysis and calculates a single X-Value.

5 Steps to Price Landed Homes

This means that you and your agent can price a landed home in five quick steps:

  1. Input the address of the Landed Home into our new X-Valuation app on SRX Analyzer;
  2. Calculate the X-Value in seconds;
  3. Inspect the comparables and adjust, if necessary;
  4. Consider potential for the neighborhood by inspecting URA Master Plan and other maps;
  5. Print an X-Valuation report to document.

While pricing a landed home is much simpler than before, it still requires human expertise.  As such, SRX Property makes landed pricing technology available only to licensed professionals.  Contact your agent for landed pricing agents or visit srx.com.sg/srx-agents to find an agent, with the SRX Analyzer logo, who can help you. 

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