Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
I am interested in one property. I am trying to determine the fair value of the house. I have compared comps of recently sold homes but that # is like 1-2 houses and they are not direct comparisons at that. (location is slightly off and other features etc...)
So I came across another listing currently on market. It is listed for $339k which is $60k LESS than the house I am interested in. It has more sqft (500), 1 more bedroom, a bonus den, same baths, double the lot size, etc... The cheaper house is a newer house (40 years old versus 100 years old) but the older home was just rehabbed to almost new inside.
So... I asked my realtor to better determine where the fair number for this house I want is, to look at this cheaper house and tell me why it is $60k less listing then the other.
She responded with you can't compare properties that aren't sold.
But all I want is to look at both and break it down. This one has a,b,c and probably worth X and this other has d,e,f and worth Y. So that means this house is underpriced and this one is overpriced, etc...
If you were working with me and wanted to look at a listed property to assess value prior to making an offer, we'd be looking at the other home asap.
It does sound like the property that you are looking at may be hard to comp. Just the age factor creates a difficulty. Some people will run from a home that has any age to it while others are drawn like moths to a flame to a home that may have some historic or period feel.
A complete update (depending on quality) can be expensive, and makes the sellers feel that they should be reimbursed for their efforts.
Just TELL her you would like to see the other home. Period.
If she is doing her job correctly, she will show it to you.
Now if she is extremely opinionated or tells you not to view it, go elsewhere.
I think an agent should show you anything you want to see.
She will show it to me. That is not a problem. What I am asking her is to use her experience and knowledge of the area, etc... And basically tell me the difference and why she thinks one is priced so different.
NatasNJ, ask her to do a CMA on both properties, AS IF SHE IS BEING ASKED TO LIST THE PROPERTY. That way, there is no confusion as to what you are asking for. Whether it is germaine to your offer or not, I'm not so sure, but if you think it will help you make a decision on what to offer... why not?????
Location: Mokelumne Hill, CA & El Pescadero, BCS MX.
6,957 posts, read 22,309,298 times
Reputation: 6471
This is an area of real estate valuation that probably keeps professional appraisers awake at night (feel free to call me a liar appraisers )
The basic approach to comps is to take the subject and compare it to other properties which have already sold. In evaluating a property that may go on the market, we often use properties which are currently on the market to determine what the competition is going to be, hence the phrase Competitive Market Analysis CMA.
An appraiser would note the differences between the subject property and the comparable properties and make adjustments up and down on each of the features to arrive at an adjusted price for appraisal purposes. Your specific question is asking your agent to tell you "why it is $60k less listing then the other." Asking prices have a component of motivation in them. If the seller is desperate, the price might be less than the market, if the seller isn't so motivated, the asking price might be higher than the market.
In the end you have several factors affecting price almost all of which are local in nature. Your request is probably reasonable, but this isn't a science, so you may have to leave the slide rule in the pocket protector
There may be a very good reason that this one property is priced different than the others - short sale, death, estate, condition, divorce, relocation, zoning change, quality of construction...
What about location? Does the higher priced one have a view? Is it in a nicer part of town? Is it near a river/lake? Location can make a HUGE difference on pricing.
*edit* I think your request is completely reasonable, and I would expect the agent to be able to handle it.
NatasNJ, is your agent specifically a "buyer's agent"? If not, she's representing the seller (of any house you look at), and I always try to remember that when formulating an offer price. I've had agents discourage me from making a lower offer because "the seller won't take it".
It sounds like you are trying to do the right thing and not lowball the offer, even though there is a nearby house that is $60K less than the one you're interested in. If it were me, I would go look at the other house and decide for myself why there's a 60K price difference. If there doesn't seem to be a clear reason, perhaps you could make a lower offer on the house you want, justifying it due to the lower price of the competition. I'm sure if the seller thinks the offer is too low, you will hear why they think the other house is 60K less and then you can decide whether to increase your offer. Just MO, but I'm certainly no expert.
With 100 year old homes you won't typically find a direct comparison. You could have a Victorian home sell with the exact same beds, bath, sq footage, etc as a Craftsman home and they will sell for different prices. Historic homes have that moth to flame thing going on for buyers as FLBob said.
You need to go and visit the other one and see why it is priced so much less. It may have a funky floor plan or need $60k worth of work. There is a home on our local market that looks great on the MLS photos (I mean KUDOS to the agent for the shots...) then you go in and see the red bidet, toilet, sink, bathtub ALL in a historic home. It is so not right...
Somethings you just need to see to understand. I think you should go with your agent to see the house. She may not have to tell you why. It may be obvious.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
)
