Finding Comps
I am a complete NEWBIE to investing (have read all the books though) My neighbor passed away and his family is turning his house back to the bank. The trouble is he owed 70K on the house. I know several nicer, bigger homes in the same area have sold for an average of 15k below that. I have talked with the bank and they are willing to do a short sale but I want to back up my low-ball offer with some comps. Can I just call a local appraiser and get this or will they charge me an arm & a leg for comps on a deal that wont pencil out? 8-)
[ Edited by swagman on Date 04/03/2004 ]
Sorry about that earlier post. My mistake!
There are a few online resources you can use to help you out, although many of the free ones are outdated. Your best bet is to use a real estate agent to help you out. Either way, an agent or appraiser might give you a general idea of the value if they think they will get your business. If you are an aspiring investor, it is important to build a report with as many professionals as you can.
Just remember a comp does not mean much if someone (even an appraiser) guesses at the value. There are too many variables to consider before an accurate value can be figured.
Good Luck!
Swagman
First check your county website; Dillon's a little far flung, so I wouldn't expect much. Some county sites have sale info, maps, copies of documents, even comps available, click, click.
Ask your county assessor and appraiser. Soft pedal it, "I really hope you can help me. I'm starting to learn about real estate and I was wondering about values and appraisals..." (try this with Realtors too; ask what you might expect to get for this place when you sell it, which you may). You may not get anyone to commit to specifics, but they might offer some useful numbers. Also this approach can get them on your side; they can be real allies.
Find out how much it sold for last, if that's relevant (may not be in this case; probably the tax value hasn't changed much if the owner was there awhile). Get a rough sense of tax value vs. Fair Mkt Value (sometimes the appraiser can tell you the % they aim for, e.g., 83%). Then look at the same numbers for comparable homes nearby, not just bigger ones (the %s might apply to all homes though, roughly). And of course whack your comps with an ugly stick a few times and calculate (or get estimates) at retail regarding the costs to make it pretty again, to make sure your case for the shortest sale you can muster is compelling. Probably you don't have much competition there, and may end up educating the banker in the process. Try to make your offer before they list it with a Realtor, though.