I am not sure what price I shuld go from. These comps go from 4000-70000. How do I make a call on that?
How close are the comps in geographic distance? Are they all very similar in size +/- 100 sq/ft or so? How far back did you go with your comps? 2 months? 6 months? More?
within a mile. Here is the comps for the one home
ADDRESS MLS # Status Area Sale/Rent SqFt Abv G DOM LP $/SqFt Abv G SP $/SqFt Abv G
1729 APRICOT STREET 10139585 Sold 2 For Sale 1300 56 $9,900 $7.62 $9,900 $7.62
1623 Briggs Street 10138688 Sold 2 For Sale 1980 3 $23,500 $11.87 $26,000 $13.13
1412 Liberty 10138535 Sold 2 For Sale 1728 39 $32,000 $18.52 $28,000 $16.20
1830 Forster Street 10137408 Sold 2 For Sale 1320 0 $30,000 $22.73 $30,000 $22.73
139 HOERNER STREET 10137011 Sold 2 For Sale 1512 12 $35,000 $23.15 $31,000 $20.50
1850 North Street 10138251 Sold 2 For Sale 1795 4 $45,000 $25.07 $41,000 $22.84
1614 North Street 10140226 Sold 2 For Sale 1710 9 $67,000 $39.18 $48,000 $28.07
1424 Liberty Street 10137001 Sold 2 For Sale 1728 61 $62,500 $36.17 $55,000 $31.83
1426 Liberty Street 10137009 Sold 2 For Sale 1728 61 $62,500 $36.17 $55,000 $31.83
805 N 16th St. 10141350 Sold 2 For Sale 2116 5 $67,500 $31.90 $67,500 $31.90
1627 BRIGGS STREET 10138650 Sold 2 For Sale 1980 23 $69,900 $35.30 $72,900 $36.82
1209 N 14TH ST 10141881 Sold 2 For Sale 1816 23 $75,000 $41.30 $79,000 $43.50
712 N EIGHTEENTH STREET 10140795 Sold 2 For Sale 1431 0 $88,500 $61.84 $85,900 $60.03
1211 16th Street 10141464 Sold 2 For Sale 1530 31 $91,999 $60.13 $91,999 $60.13
Total Listings Avg Avg Avg Avg Avg
14 23 $54,307 $32 $51,514 $30
The sizes of these places are all over the lot, some are 1300 sq/ft and some are 2100 sq/ft. How large is the one you are trying to price?
little over 2000
Rich makes a good point, size matters. Just because a property is within a mile and sold within the last 6 months does not make it a comp. When an appraiser chooses comps he ultimately makes adjustments to each one to make it more comparable to the subject property. Adjust for sq ft, number of bathrooms, functional obsolesence etc.
How far back do you normally go?. I never seems to get many houses on the street if I only go 6 months
You don’t want to go back too far or you’ll get data that is not relevant to current market conditions. Consider that many markets are declining in value today, therefore a sale that happened even 6 months ago may be overpriced. It’s okay to go off the same street, just look for truly similar properties in similar neighborhoods etc.
This is a perfect example of why you should become an EXPERT in your market. If you’re going to be a serious investor, you should become intimately familiar with your investment area. I would suggest looking at 100 or so houses (inside and out) in your area. Open houses are a great place to start.
Good Luck,
Mike
At this point I think even 6 months is too far, I like to look at the last 2 months if I can. Prices are sliding bigtime and the world was a different place 6 months ago.
You need apples to apples.
You need to compare against square footage, lot size, garage, number of bedrooms, number of bathrooms and fireplace. Age can also play a factor. It some areas it’s desirable to have an older house, in other areas it drives the price down.
I agree with Rich that 6 months back is still pretty useless, things sold within the last 2 - 3 months is a more accurate gage. Lenders won’t look at anything past the last 6 months anyway.
Hi!
As a general rule, take a comp that is 1/8 mile or less, of similar size in building and lot. Same street is best.
Other considerations that require some knowledge of repair or replacement to assess adding or reducing from similar comps that have SOLD, not listed, cause listing is a subjective thing, and sold also has variables, ie, market conditions, buyer motivation ( check the transfer tax and talk to the neighbors, you will learn a lot). In essence, above and beyond the average sq ft, consider the following for evaluation. Location of property compared to comps, Condition of the property, age, type of roof and remaining life, landscaping, plumbing and electrical system and other amenities, pool, spa hot tub, etc. Parking, design desirability and the close fit to your investment objective, (to either flip or hold). ECONIMIC and REAL ESTATE MARKET CONDITIONS.
An appraiser evaluates a property based on mainly cost to build or replace. As an investor, take that into consideration and then consider the parameters stated above and how it will affect your investment objective and finally keep this in mind “It doesn’t matter how much you pay if you have a READY BUYER/Investor willing to buy and the buyer is happy or the investor makes the desired ROI. Reevaluate your offer/buying strategy in terms of being “profitable” rather than being accurate; cause the accurate is only accurate if the goals are met.
Hopes this helps
Niki
It also doesn’t hurt to drive your comps as well and see what they look like in person, see exactly what you’re dealing with. Maybe one sold for $50k less than the others, when you see it you may see why…might be a terrible lot or a rundown house.
Agree with Rich. Here the difference could be a pool or lakefront property or general condition. You might need to take a look in the field.