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EQUITY NOTES

Comps

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Hi

 

I still have a hard time trying to get the feel of a reasonable offer on a home value

 

I currently have a seller open to a lease oprtion and have checked comps mostly with zillow

 

 

They show zestimate at 205k seller insists 229 is what the home is worth, stating a realtor gave them this comp on there home

 

 

Are sellers that much off the mark on asking price or is zillow to low?

 

 

when I run area comps within a mile or so some higher and some much lower although homes are similar

 

Do any of you have a relaiable free site you use for comps?

 

The seller did say if sold by owner they would reduce price somewhat

 

I do not want to do the deal when comps on zillow show such a difference

 

 

I have not made an offer yet for a lower price to the seller

 

 

Do you think I should use zillows comp and make an offer and move on ?

 

Wanted to see what some of you had to say

 

Any advise appreciated

Tom

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Hey Tom,

 

First of all, if the Realtor said 229k, take 6% right off the top because they won't be paying commission. That brings you down to around 215k if my math is correct.

Next, if you were to look at all of the listed properties in the area that have been on for more than a couple of weeks, the prices have probably all been dropped. So if the Realtor said they'd start at 229k, they probably plan on dropping the price 5-10k a few weeks after listing it. The idea is, it's no longer a NEW listing, so dropping the price will generate more attention again.

So Realtor "prices" aren't an accurate indication of what the homeowner would actually GET, so point this out and that should get your price down some.

 

Zillow isn't really a good indication of what the value of the home is. You can see comparable "Sold" houses, which can be a good help, but your best bet would probably be to find an agent who's willing to work with you and have them send you properties that meet your criteria. I had posted in another thread a few weeks back about how I pull my comps, and here in MA I had actually found a free MLS search website before I got my license, which worked OK for what it was.

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I always found agents to give me comps. This is a very important part of your business and you need the most reliable numbers you can find. I based them off of sold(esp. when buying) with taking into consideration what the market is doing. Look at dollar per square foot, condition, location and that's all stuff that is available from mls comps. Part of it is experience and skill that comes over time, but it really isn't that hard with right info and a little practice. I would say err on the side of too low a price when buying(or negotiating what it should be offered at in a C/A). I would not trust what the seller is telling you he heard from some agent. Who knows what that agents intentions were. Having solid numbers to take to a seller is hard to argue with. If the seller wants more than the market will bear it's time to move on. Hope this helps.

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Tom, asking price is totally irrelevant in determining the value of any property. There is only one method that matters in my opinion, and that's sold properties in the last six months. Every homeowner on the planet thinks their house is worth more than it is. Every Agent on the planet will tell the homeowner what they want to hear in order to get the listing. Then, a month later, they begin the process of knocking down the price to where it should have been in the first place.

So, find yourself a willing Agent who can assist you with comps, or try a mortgage broker. Both have access to all sales data and if you can do something for them they should be open to working with you. It's a one-hand-washes-the-other relationship.

Short of that, you can try those free online sites like Zillow, but you'll need to filter out all the data that is irrelevant to the subject property and draw your own conclusions. The "Zestimate" that they provide is useless.

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There is only one method that matters in my opinion, and that's sold properties in the last six months.

 

Michael I would suggest that the active listing price is also relevant in a declining market. To further that note we should also look at the amount of inventory on the market and the number of units sold within a given period of time and keep an eye on the indicators of product hitting the market from the NOD filings and the unreleased REO pool. These factors heavily weigh on values.

 

As for a way to determine value I have always said that an investor, especially one who is new should be out in the market place and driving the area they’re wanting to buy in. While there have a couple six packs. One is knocking on 3 active houses and 3 just sold houses to determine the seller concessions and what caused the buyer to buy. Weigh the interior and exterior factors of the property. the other six pack is of the neighbors of the seller. Find out why the seller is selling. Besides you might find another seller or a buyer for the house you’re hoping to buy.

 

Bottom line is that you cannot rely on a CMA. At best it is an opinion. You can set up with companies like CoreLogic to have a BPO performed on a house for 125 bucks or have three independent agents do the same thing for free. Nice thing about CoreLogic is that they also use some algorithms which seem to be fairly accurate. Especially sense they are tied to the pre-foreclosure and foreclosure market. CoreLogic is the largest provider of data for everyone from credit companies to foreclosure data sites not to mention First American Title.

 

With that said feel free to use my access to fastweb a data provider of First American Title and CoreLogic.

https://fwprodweb1.firstam.com/fastweb/fwlogin.asp login is REIuniverse PW ZZKIFWO977

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