Comps

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Hi All

 

Hope you are having a good summer.

 

I have a question that I need some good naked investor answer to:

 

I have a seller (rehabber) who has a nice 2 story 2- bed georgian home for sale in an excellent area by me.

 

He has it fsbo for $239,900.

I have checked zillow and the higest in the area for simiular properties one on the same street is $157,000.

 

When checking with the assessor office its shows the 2013 market value at $94,500.

I see quite a spread there is the tax info generally in line with market value as I mentioned they show a market value also but less than zillow

 

Shoud I take a pass if sellel wont move down on value. I know he replaced roof, furnace and electric, but I do not think I can a lease option to a tenant-buyer for the high price would work, and yes he asks me if $2,000. per month rent is ok, well the area rents for homes is $1500.. tops for similar properties.

 

I think I should politely say I can't do the deal at that price (he also has a bunch of condos i could get options on if I can work with the guy.

 

Please Advise,

Will meet with him later today

Thanks for taking the time to review my post

Tom

[MichaelC 160]

Tom, tell the owner that the sales data you looked at doesn't support his asking price. Take a "I'm sure it's me" approach, and ask him where you are going wrong and request to see his sales data. In other words, make him justify his asking price. I suspect he won't be able to, based on what you wrote above. If I'm correct, it serves no purpose to take on the deal when it is so overpriced.

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TtHANKS

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Thanks Michael. I guess I eas looking for that answer.

 

I went over what I said and did on this call.

 

Wanted to ask a question also that I should have perhaps done.

 

He offered to come down to $210,000. and offer concessions to a buyer.

Is it ok in your opinion to do a pure option with wording at the bottom saying:

This option with seller approval can be replaced by a lease option and a residential lease.

with a new agreed upon sales price.

 

I felt I could have pushed harder as he thought the property was not suitable for a lease option, but perhaps I should have pushed for a pure option as he would negoiate a cash buyer.

I felt I got hung up to much on sales price and forgot my other options that may have worked

Tom

[MichaelC 160]

Tom, there aren't any options available if the terms aren't realistic. The fact that he dropped his price $30K just like that tells you he knows he is dreaming about the price. Did you ask for his sales data?

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Michael I did tell him in a nice way that all the data I have checked even the same street shows maxium value at $157,000. He went on about the work he did on the electric and other items are not taken into consideration on zillow etc.

He wound up saying i can take a look at several condo;s he has andd thinks they may be more in line with doing a leae option than this property. Guess sometimes you just have to walk away, was kind of disapointed as I thought I could deal on this property.

 

I agree I do not want to waste time with unrealistic selelrs spending time on something I can't move

 

Thanks for your quick reply, perhaps I can get the condo's. we will see.

 

Tom

[MichaelC 160]

Homeowners always overvalue the work they've done. Unfortunately, what they usually fail to accept is that a $300 plumbing upgrade doesn't equate to a $10K increase in value. Best bet is to walk from this one, but check out this gent's other properties.