|
|
||||||||
|
Calculating Thompson Corner Resale Prices CPI FORMULA: Purchase Price ÷ CPI* on date of purchase x CPI at date of listing contract = base resale price The base resale price shall be at least 3% greater per year than the price at date of purchase, and not more than 5% greater per year. If the base price is less than 3% greater per year by the above formula, calculate 3% (.03) times purchase price, divide by 12 and multiply by the number of months the unit has been owned. The larger of the two calculations (CPI formula or 3% formula) is the base resale price. (In a few years the CPI formula will exceed 5% of the original purchase price. To calculate 5%: .05 x purchase price divided by 12 x # months owned. If this calculation is larger than the CPI formula, use the lower of the two.) plus approved capital improvement costs (not exceeding 20% of original purchase price**). *Consumer Price Index: All items, U.S. City Average, Urban Wage Earners & Clerical Workers (Revised), published by the U.S. Department of Labor, Bureau of Labor Statistics. **Approved capital improvements that are not subject to the 20% of original purchase price limit include: cost of improvements to add &/or finish permanent /fixed storage space, garages and decks. Finishing basements is intended to be included in "finishing permanent/ fixed storage space." Fancy finishing is not. Finishing a basement beyond using it as a storage area would be subject to 20% of original purchase price maximum for recapturing capital improvement costs at resale. Note: The CPI is always 2 months behind the current month. Therefore, in October you can access the August CPI. All calculations are based on using the most current numbers on a given date, which are listed by the second to last month (e.g., August for October). |
||||||||
|
Valley Housing Partners |