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I am thinking about putting an offer in on a townhouse in CT. It is in a small complex, maybe 10 units. Problem is, the inside is in rough shape and needs updating. I looked through the tax records for the complex and noticed the most recent sales happened in late 2006-2007 (which i thought was the peak of the market) for around 25% less then the amount the property is listed for today.
I know its impossible to tell the condition of those properties that sold, but is this a red flag that the property I am interested in is priced very high? How should I further investigate this?
You need to look at what comparable units are being sold for today (not listed at), and take the cost of the work needed to make the unit comparable and that is how you work out if it's worth it or not. What it once sold for is not an indication of what someone would pay for it today.
I am thinking about putting an offer in on a townhouse in CT. It is in a small complex, maybe 10 units. Problem is, the inside is in rough shape and needs updating. I looked through the tax records for the complex and noticed the most recent sales happened in late 2006-2007 (which i thought was the peak of the market) for around 25% less then the amount the property is listed for today.
I know its impossible to tell the condition of those properties that sold, but is this a red flag that the property I am interested in is priced very high? How should I further investigate this?
Go and take a look at the property and offer what you think it is worth. Anyone can put *any* price they want on it. The bottom line is what the property is worth to YOU.
You could also ask your realtor to do a comparative market assessment (CMA) on the property and they would have additional information that would more accurately determine the true value of the property.
I've already presented the question to my agent and am waiting on a response. It just seems odd that a property could be worth 25% more in 2011 than in 2007. I'm not sure how much worse condition it could have been in. The other sales (2005-2006) also seem consistant with the 2007 number and there has never been anything close sold in the complex to what this place is asking for.
I am thinking about putting an offer in on a townhouse in CT. It is in a small complex, maybe 10 units. Problem is, the inside is in rough shape and needs updating. I looked through the tax records for the complex and noticed the most recent sales happened in late 2006-2007 (which i thought was the peak of the market) for around 25% less then the amount the property is listed for today.
I know its impossible to tell the condition of those properties that sold, but is this a red flag that the property I am interested in is priced very high? How should I further investigate this?
If you are working with a buyer's agent, he/she should present you with the comparable recent sale prices in that area (city or town), not just in that complex, and counsel you prior to your making any offer. Any professional buyer's agent does that for the client. Don't shoot fish in a barrel in this market, regardless of where it is located. If nothing has sold in that area for a year, something doesn't jibe, there had to be sales within the area; an appraiser can find comps. The buyer's agent can still go back to past sales and adjust for this economy and for condition of the unit. Ultimately, it is your decision.
You have no idea what was motivating the sale back in 2007. The person could have been desperate and took a low ball offer. I wouldn't put much stock in any previous sales price.
You have no idea what was motivating the sale back in 2007. The person could have been desperate and took a low ball offer. I wouldn't put much stock in any previous sales price.
It wasn't just one sale. All previous sales seem to jive with the 2007 numbers much more so then what is being asked for today.
The area is expensive, so looking at comps is a bit difficult as this borders the very expensive downtown area (but is located on the "rougher" side)
It wasn't just one sale. All previous sales seem to jive with the 2007 numbers much more so then what is being asked for today.
The area is expensive, so looking at comps is a bit difficult as this borders the very expensive downtown area (but is located on the "rougher" side)
I guess another way to look at it is what else is available for you to buy today? How does this place compare to the other places? For you, it is worth more or less than those places? Is it prices more or less than those places?
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