How to Find Equity (newbie question)

General Real Estate Investing
1

;D Hi there…

It’s a brand new year and a turning point in life (just turned 25).
I’ve always been hesitant about jumping into the Real Estate world…I just didn’t think I was prepared - it just seemed it was so overwhelming. Also, I was definitely unknowledgeable of just basically everything.

However, the past 6 months… I’ve been seeking to know the ins and outs of real estate and finding out the right direction I want to head towards. I’ve been doing some research, networking - talking to individuals with core experience, and pulling together a contact list of a potential power team. (oh, and researching communities, future city zoning and construction plans, looking into fixer-uppers in booming communities, etc…)

MY QUESTION(s):

  1. How do I find the equity on certain homes I’m interested in?

  2. WHAT exactly is equity (in lamen terms)?

  3. Is there an ONLINE (hopefully free site) where I can do a search and populate that information? (i.e. similar to county public records)

2

  1. I find approximate equity in a suspect property by calling my appraiser and asking for a back of the envelop value on the address in question. The actual appraisal has to be obtained before you close anyway. Then you will know the equity.

  2. Equity is the difference between what you pay for a property and what the property appraises for.

  3. You can get close by asking a real estate agent to give you sales comps in the area. Make sure they are for the same type of property in the same subdivision and section and are within 6 months. Average them up and you will be pretty close. Remember the comps are not asking prices but sold prices. Since this is my business, I see these comps as a vital part of my business and need this information so I have purchased access to the information from MLS that gives me the same data. I see it like a plumber and his wrench. He doesn’t rely on others for his tools, and I don’t rely on others for mine. You may want to find out if you can do that locally.

3

To see comps, try www.Zillow.com and www.RealEstateABC.com to see recent home sale prices.

I highly recommend, you DO NOT use the “Market Value” that they advise and do your own.

To see homes that are currently selling in your area, try searching for “{YOUR STATE} FREE MLS” and see if you can find a good MLS.

What state are you in, I’ll help you find a FREE MLS, if the realtors in your area offer them.