Mortgage holders, servicers and investors managing or selling property in unfamiliar markets need a tool that provides insight into the complex mix of property, neighborhood and market factors and trends that drive property values and market potential. We answer that need with HomeStandings™, an innovative analytic tool that mimics the understanding of home price influences gained from living in a neighborhood.
While a home’s age, size and amenities factor into its price, current and future property values encompass much more than the home. Comparable sales data, transaction history and automated valuation models (AVMs) attempt to capture the valuation picture, but they can overlook subtleties, creating a reliance on broker price opinions (BPOs) and appraisals. Less apparent factors—schools, crime rates, foreclosure activity, supply and demand, prevailing rents and demographics—can carry equal or greater weight in the valuation equation. Now that legislation has turned mortgage holders into landlords on REO properties with existing leases, understanding the nuances that drive purchase and rental prices is essential to managing risk.
HomeStandings resolves these traditional information gaps by assisting:
- Appraisal review teams reconciling AVM, BPO or appraisal values
- REO asset managers deciding whether to sell or rent properties
- Investors performing due diligence prior to buying properties or distressed asset pools
HomeStandings combines property, neighborhood and market characteristics to provide a real-world understanding of a home’s value, marketability and rent potential.
Market and Inventory
Assessing a home’s value requires solid knowledge of its surrounding market. Many characteristics exist that determine price and on-market time, including:
- Foreclosure rate
- Price relative to market
- Foreclosure exposure
- School district rank
- Crime rate
- Rental occupancy
- Distress dominance
- Sale price
- Inventory level
- Price index
The HomeStandings grade captures these factors for quick reference, while the report quantifies the complex elements factored into the grade. The straightforward presentation of neighborhood and market influences delivers the understanding servicers, mortgage holders and investors need to make well-informed decisions on distressed asset management and disposition.
The HomeStandings unique graphical interface speeds comprehension through a familiar grading system and color scheme. A variety of property, market and neighborhood characteristics are rated using “A” through “F” grades, while a stoplight color scheme distinguishes between positive and negative outcomes. The enhanced clarity HomeStandings™ provides leads to faster, better decisions that increase efficiency and reduce losses.
HomeStandings contains a wealth of rental information to help mortgage holders and servicers navigate the lucrative, yet risky, rental market. HomeStandings assists in determining the feasibility of renting by generating rental comparables through updated, dynamic pricing information or a proprietary rental model that accurately simulates rental prices based on property and market information.
Investor Analysis Module
The HomeStandings investor analysis module moves beyond evaluating current market prices, allowing investors to weigh business decisions and explore complex strategies. By computing an income-related terminal valuation, flip value and long-term holding value, HomeStandings facilitates long-term decision-making and comparison to IRR goals.
HomeStandings is the first real estate analytics system to identify the characteristics that make a real estate asset desirable to the current owner and the market at large. This unique approach eliminates the guesswork typically involved in making adjustments for qualitative market factors. As a result, servicers, mortgage holders and investors can act with confidence in any market—whether down the street or across the country—with all necessary information close at hand.