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Old 08-16-2013, 05:30 AM
 
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I haven't bought/sold a home since the housing bust. So I know it's a different ballgame with all the foreclosures/short sales etc affecting the price. I also have heard they are paying closer attention to what's inside the home as well, as in finishes. (before it was all on sales/sq footage)

I am in a rental (that the owner wants to sell) that has never been updated since the 70's. It's all berber carpet, laminate counters and just all old/dated finishes. The area I am in is an established community where you will find dated homes like mine or completely renovated homes. The last several that sold around here were from those two categories. The renovated ones have all granite counters, stainless appliances, wood floors etc. There were also some short sales as well.

Let's say the dated homes here with similar sq footage of 100 +/- sq of my house sold for $100K. The renovated homes sold for $175K. (that is general numbers but the difference is about the same) The houses themselves are different but the land acreage are cookie cutter and the same.

How will they appraise the home I am in?

Last edited by momtothree; 08-16-2013 at 05:44 AM..
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Old 08-16-2013, 05:47 AM
 
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The appraiser will look at the most similar sales in terms of size, condition, amenities, etc. and type of sale and compare your home to those and make adjustments based on the market reactions to the differences.

The 75K difference for finishes seems high in that price range. Are there other factors involved?
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Old 08-16-2013, 05:53 AM
 
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Quote:
Originally Posted by thebigW View Post
The appraiser will look at the most similar sales in terms of size, condition, amenities, etc. and type of sale and compare your home to those and make adjustments based on the market reactions to the differences.

The 75K difference for finishes seems high in that price range. Are there other factors involved?
That's what's puzzling me. There are stark differences in price but not so much in the what I could see on the outside. Obviously an appraiser when we are ready to buy will have access to more info than I can. I know that the renovated ones are really nice and this is a buyer's market here. So I am thinking if you have a fixer upper, it has to be aggressively priced to sell? And the renovated ones are less common in my neighborhood and sell really well?
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Old 08-16-2013, 07:55 AM
 
Location: MID ATLANTIC
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If I had to guess, if the home you are currently in were on the market, they would probably start try to price it right under 150K, but buyer demand would force the price down further.

The obvious appeal for the landlord, no vacant months, no cash required for improvements. The appeal for the tenant, no move and hopefully, savings from the commission, not to mention you already know all the warts about the property. But most important, what is motivating you to consider this home? If it's not wanting to move, you don't want to disturb your comfort zone......that may not be the best reason to buy that particular home.

It's my experience, the landlord only sees the 175K and is blind to his home not being in the same league......and even if they acknowledge their subject is a bit inferior, they won't price it in bargain territory for you. If your area is hot, an agent will advise them to put 20K in and get the full profit. On the flip side, you never know - ask them for a number and you may be surprised. But, before you do anything, know what's going on in the neighborhood. How quick are the homes going? How many offers did the seller receive? A few phone calls will pay off.

Good luck!
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Old 08-16-2013, 08:17 AM
 
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We rented this home because it ticked off our list of everything we love. We have lived in this community before and like the feel of it. Landlord mentioned that he was going to put it on the market after the last tenants left but was advised by friend/realtor that because it's a fixer upper, he will have trouble selling it. If we do buy it, it will be between us and a real estate attorney. He does not want to pay commission.

This market is strange, the fixer uppers sit for about a year before selling and often after several price drops (100K). The overpriced reno homes sit for about 6 months before price drops into something reasonable then sold (175K). And then there are some priced so well/cheap and they sell quick. I think the latter homes are empty nesters who are the original owners and this is a pure cash deal for them (no mortgage to pay off) so they can afford to sell their dated homes for a lot less to get a quick sale. These are rarer but I see them, they are in the 70K-90K range.

I was trying to get a rough idea of what he might want for this house. He bought it for all cash 10 years ago so he will profit if he hadn't gotten any loans on this place since then. He acknowledges a lot of work has to be done to update as it as he mentioned he didn't want to do all of them to sell. But I don't want to approach him yet till we have a few more financing stuff to clear up and save more of a down payment to avoid PMI.
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Old 08-16-2013, 08:44 AM
 
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Is this a trick question? You say the houses most similar to yours sell for $100K. There is your answer.

Of course, you should get an appraisal first if you intend to buy it. It will give you peace of mind and make your offer seem reasonable to the seller.
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