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I have found a home that I am interested in but believe it's overpriced at $189,000. The home was built in 1973 and is pretty much original. There was a recent sale, last month, of the exact same home and neighborhood that I am comparing it to.
The recent home sold was totally remodeled to include:
New heat pump with oil backup
refinished hardwoods
redone kitchen
redone bathroom
added a finished sunroom
added a deck
added inground pool
The lot on the other home is also slightly larger at .5 acres vs .4 and is also better as it is totally flat.
The remodeled home sold for $209,000 after being redone. How should I go about determining a fair price on the home I am looking at? Should I determine the prices to complete all the work they did and then work backwards from their selling price?
There are also several houses that have 4 bedrooms and 2 baths that recently sold within the last year in the same neighborhood. These ranged from $191,000-$245,000. These homes are not the same type but as mentioned are almost 1000sqft larger.
I am having a hard time coming up with a value based on the remodeled house and the other larger home selling prices. Advice?
I have found a home that I am interested in but believe it's overpriced at $189,000.
How should I go about determining a fair price on the home I am looking at?
The same way that the seller should have... objective assessment (aka appraisal).
Quote:
I am having a hard time coming up with a value based on... Advice?
You can always go with your gut.
Make an uncomplicated (not contingent) offer at what you feel is fair.
See what happens.
Last years sales prices might as well be 2005 prices, they mean diddly squat. Compare with recent comps. Housing market is not a fixed price. Lots of factors (as we all know) can bring prices up and down. Is the house overpriced because you are using last years sales comps? What are the most recent comps? Last three months?
Just because the house has not been remodeled doesn't mean its automatically in need of remodel. Do you just feel like its worth less because it hasn't been remodeled as the other house you are using to compare has been? Maybe it's perfectly fine inside.
All you can do is make the offer you feel the house is worth, have it checked out if you are the accepted bid and then negotiate if you find something wrong or comes in appraised for less
If you want a full new remodel, in ground pool type of house on .5 acre on flat land then dont look at this house if it doesn't meet your requirements.
Last years sales prices might as well be 2005 prices, they mean diddly squat. Compare with recent comps. Housing market is not a fixed price. Lots of factors (as we all know) can bring prices up and down. Is the house overpriced because you are using last years sales comps? What are the most recent comps? Last three months?
Just because the house has not been remodeled doesn't mean its automatically in need of remodel. Do you just feel like its worth less because it hasn't been remodeled as the other house you are using to compare has been? Maybe it's perfectly fine inside.
All you can do is make the offer you feel the house is worth, have it checked out if you are the accepted bid and then negotiate if you find something wrong or comes in appraised for less
If you want a full new remodel, in ground pool type of house on .5 acre on flat land then dont look at this house if it doesn't meet your requirements.
All the comps I did were sold within the past six months. The exact same house was sold just three weeks ago. The home appears to be structurally sound however IMO needed remodeled. The appliances, carpet, etc are all original to 1973. I assume that some would view that as not needing a upgrade, but for us it does. I just can't get down with the shag carpet .
I do not want a pool or deck, and some of the upgrades are questionable. I was just trying to determine that if house A is worth $209,000 with xyz done what is house B worth lacking xyz.
First forget the differences in lot sizes. Unless you're talking about a very steep hill, the size difference is insignificant. Appraisers won't give much value to an inground pool unless you live in a climate where it is essential. Sight unseen it sounds like it's already priced pretty close to current market value--maybe $5,000-10,000 over a final price. They've taken the need for updates into consideration.
Are you trying to figure-out how much YOU should offer ... or how much you think the SELLER 'should' be willing to sell for, based on local comps?
The former is a by-product of what you feel the house is worth to you ... unless you think circumstances might allow you to drive the buyer's price down.
The latter will only work if the house has been on the market long enough to make the seller anxious --- AND you are able to persuade them to 'buy-into' your comp. logic. (Many sellers simply have an emotional attachment to the house that precludes logical pricing).
The difficulty with the latter is that the seller's Realtor has already told the seller what they should sell the house for (based on comps) ... and may be reluctant to support an alternate justification (even if it is accurate) - or even submit your rationale. To get around this, you can submit a copy of your 'comp logic' directly to the seller. But, even though that may make the seller feel less like you are 'low-balling' him, he is still not obliged to accept it.
Are you trying to figure-out how much YOU should offer ... or how much you think the SELLER 'should' be willing to sell for, based on local comps?
The former is a by-product of what you feel the house is worth to you ... unless you think circumstances might allow you to drive the buyer's price down.
The latter will only work if the house has been on the market long enough to make the seller anxious --- AND you are able to persuade them to 'buy-into' your comp. logic. (Many sellers simply have an emotional attachment to the house that precludes logical pricing).
The difficulty with the latter is that the seller's Realtor has already told the seller what they should sell the house for (based on comps) ... and may be reluctant to support an alternate justification (even if it is accurate) - or even submit your rationale. To get around this, you can submit a copy of your 'comp logic' directly to the seller. But, even though that may make the seller feel less like you are 'low-balling' him, he is still not obliged to accept it.
I'm honestly trying to determine what the house should be valued at. Basically I am going to do the upgrades and do not want to overpay. I don't want to end up putting in more then it's worth and end up with the selling price of $209,000.
The house has been on the market for almost two years. The owner lives within the neighborhood and may be related to the original owner (child?). Not sure on the child part but it seems to be. The realtor informed us that they are ready to sell the house now and are open to offers at this point. I honestly don't want to lowball them or offend them. However, like I said I don't want to put more out for the home then we could potentially get out of it.
Do you think a printout of the recent selling coupled with a cost breakdown for a kitchen/bathroom/flooring remodel would be appropriate?
If someone sent me a cost breakdown for remodeling I would find it offensive and presumptuous. Your taste and desires may not be my taste.
Have your realtor explain your price based on comps and go from there.
That makes sense. Thanks for that POV
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