How do you best assess Fair Market Value for a foreclosure to rent due to current markets conditions? I understand the basics but trying to assess in this market has been a little more challenging.
I did some checking to assess asking prices of properties and found current asking prices are in line for what sold end of 2003 or beginning of 2004. Recent nearby sales are normally a year old and approximately 25% higher at that time.
Information I’ve read was that RE will go down 15% this year and 10% next year (CNN - Merrill Lynch). Information I’ve was told was that the market will bottom out as early as third quarter 2008 or first quarter 2009 (RE agent…I know!).
Any tips, advice, etc would be greatly appreciated…Thanks…
So nothing has sold in the last year in your area? Are you getting comps from a realtor? In a changing market like this, you have to have very recent sales - no longer out than 3 months ago.
Listing price means nothing - the buyer decides the selling price, not the seller.
It can be quite a challenge to determine an appropriate value in a market like today. In my market, we have to take into consideration all the REO’s. What a freak show? This is not something we considered before. REO’s are on the market on average 185 days and even with tons of incentives the suckers aren’t selling. So I always use my lowest acitve REO as the rock bottom price and then look at the solds and average them out. It just depends and hard to explain really. Best recommendation would be to work with a Reator who understands your market.
That’s the trouble I’m having. A REO I saw two weeks ago just went down from $271k to $241k. Its still too high with all the work that needs to be done.
I’m trying to keep it simple and start with knowing what the rental market will bear. I like the idea of starting with the lowest active REO. I wouldn’t mine working with a Realtor but I’m not comfortable with the few I talked with. They’re seem to want to extract the highest possible offer, which I understand, but I don’t see how it would benefit me.