Comparables
So, I have a contract on a property for 240 that needs some work. The price I paid is appropriate, but I'm a little afraid about the resale value after repairs... The comps are all over the map...
A property with 3ksqft larger lot (it had 12k, mine has 9k), and twice the space, sold in 8/02 for 290. If I double the interior space of the property, should I be able to expect 340 for it? Not quite sure what kind of repairs to do on this place, which ones will pay off the best.
I can send the address to anyone who wants to look. I appreciate any help =)
-Joe
The standard model for comparables is to find 3 properties exactly the same in features, location, size, etc.
No three are exactly the same but sometimes you can get really close (three condo's in the same building as the property in question). Other times minor differences make a large difference in value (mountain view from one side of the street but not the other; lake access from one side but not the other).
Find properties within 1/2 mile of the subject property. Consider how they are the same and how they are different. Focus on style, number of bedroom, bathrooms, condition and location. Look for differences in how each was sold (all cash, conventional financing, seller financing).
If you were to list the 4 properties on one page in columns you would then list each of the major differences and make a deduction or credit for the feature. An extra bedroom might be worth $5K or $10K (or what ever seems to be the norm in your area). Same for bathrooms, etc. If necessary see if you can visit the properties that you are using as comps. Or speak with the realtor that was selling it.
There is certainly more to it then what I just listed. The basic principles are as I noted.
Easier is to use the various on-line services that try to provide a comp once you provide the specific property details (address mostly). Yahoo and others offer such things. There is a link on the site here (I think it is here) where you can find 3 or 4 such services.
Finally, ask 2-3 realtors to come out and offer a price as it and with the changes/repairs. They will provide comps if they are doing their homework. Try to reward them later with the sale or some other business so that they know that if they provide you will good information they will get something at some point.
John
[addsig]
Ok, well I bought an appraisal report on the property from the service posted here on tci
It came back at 230... my contract is for 240... The property sold back in 02 for 155, and it was in very bad shape then, just about the same shape it is in now, so I'm thinking that that low sale price is making the appraisal off a bit... The sellers bought it to repair it, but never got around to it.
Any opinions?