|Re: Establishing unit pricing||<– Date –> <– Thread –>|
|From: fabers (stevecityvisioninc.org)|
|Date: Mon, 9 Jan 2006 07:35:20 -0800 (PST)|
Nice timing. We are beginning our unit pricing/selection process this evening at our meeting.
Preface: We are a 20 unit, urban cohousing development on 1.1 acres. (it's tight).
Our Phase One is to have everyone do a preferential voting of units on the site. We have a site plan and members will "vote" for what they think are the most desirable units in each type: Best C units, Best A units, Best B units. (we are trying to avoid people purposefully not voting for a unit because they want to keep that unit's cost down) At the end of this process we will have a rough estimate of the most desirable and least desirable units on the site.
Our Phase Two will happen after we get square foot costs and add in some additional cost variables (exterior finishes). We have duplexes and triplexes, so an interior/sandwiched unit will have less cost because of minimal exterior surface. We have been warned not to adjust prices too much, and specifically undervaluing the smaller units. Many cohousing groups desire to keep their smaller units more affordable, but that cost gets passed on to the larger units. However, there isn't huge cost differences between small and big units because the major cost is in kitchen and bathrooms. It could be that if you adjust too much, the smaller units will appraise too high and the large units too low when you go for final financing. I've heard of groups that undervalued their 900 sq/ft units and then when they were appraised, owners already had 25k in equity before they moved in. People who where trying to finance large units had a hard time. The big thing to remember is that it is a zero sum game. If you take 5k off one unit, it gets passed on to another unit for 10k difference.
Phase Three: We will be having an outside consultant take our Phase One and Phase Two results and then adjust unit pricing accordingly. We don't anticipate giant differentials because our site is small and each area of the site has its own amenities. However, people will make a change in which unit they pick based on $5,000-8,000. We opted for an outside consultant because we did not want to stress the group out bickering over a few thousand dollars and people feeling like they had to defend their unit from attack.
Phase Four: After the final pricing is in, people will select their unit based on seniority, unit type and what they can afford. We hope to be able to guarantee the individual the cost of their unit at this time.
Anyway, hope that helps. We will let you know how it goes. Steve Faber Newberry Place On Jan 8, 2006, at 10:40 PM, Leila Snow wrote:
Eugene Downtown Cohousing is ready to price our units. We would like to price differentially based on whether the apartment faces a busy street vs. a quiet alley, is on a corner with more windows or sandwiched, etc.We'd like feedback about how other groups have used differential pricing, and how well it worked. Reading the archives surfaced the following: Ask a local residential appraiser to recommend pricing differentials Poll members to determine favored amenities/locations, and price accordingly Pricing based on square footage plus number of kitchens and bathrooms, views or siting Larger units are cheaper to build per square foot, so price per square foot is not appropriate Differential pricing awards more desirable sites to those with more money, perpetuating inequity - all should be equal All should not be equal - worked fine to have differential pricing, no less community value of members who have fewer economic resources Differential pricing used to make some units more affordable - worked well Choose unit in order of seniority - rewards those who came in early People who bought early were assessed less than those who bought later, because they assumed more of the risk Does anyone have any further thoughts or experience with differential pricing? Thanks much for your help! Leila Snow Finance Committee Eugene Downtown Cohousing _________________________________________________________________ Cohousing-L mailing list -- Unsubscribe, archives and other info at: http://www.cohousing.org/cohousing-L/
Establishing unit pricing Leila Snow, January 8 2006
- Re: Establishing unit pricing fabers, January 9 2006
- Re: Establishing unit pricing Robert, January 9 2006
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