I’m sure the title company also uses the same numbers. There is no magic formula.
For my purposes (making offers), I will use the Low comps, or at most the middle. If I’m going to make a mistake, I’d rather it be a small one.
When I go to finance, then I will offer the High comps to the company/person who is going to finance me as FMV (of course). Sometimes they will do their own search - sometimes they’ll go with my numbers, especially since I can “prove” the numbers are right (printouts direct from MLS/tax rolls).
I have found an investor who will put up all the money for real estate transactions. The requirements are stringent, but the money is there. I must buy at no more than 65% of the “fair market value.” This is exciting! The only thing I have to do now is find the property. I have to provide the following information:
fair market value
Asking price
Description of property
What I want to do: Rehab, Flip, Sell, Refinance
I have found a realtor who is new, like me. He doesn’t have experience with investors. However, he is willing to work with me. There are a lot of things that he doesn’t know. I told him that I believe in loyalty and let’s see what happens. One of the areas that I have a hard time is finding the “Fair Market Value” of a prperty. I get some printouts, but they only include the asking price. He doesn’t seem to know how to get it or what it is. I need this information to submit to my investor/partner. The nice thing about my partner is that price is not a hinderance. Also, we can close in less that 30 days. What do you all think? How would you handle this situation? What other methods can I use to get FMV? Would you work with another realtor/broker? Is there anything that I’m missing? I’m interested in your responses. THANKS!
just wanted to add be carefull with new realator.what he dont know myte hurt you.my rookie realator pushed himself on all my investors to get buisness.he really didn’t know any better but may have hurt my chances
A realtor, even a new one, should be able to go to their broker and ASK them how to perform a “Comparative Market Analysis”. Every MLS software has this option in it, and it is very simple to use. He/she should also have access to the tax records
To get FMV, the best thing to do is to search by subdivision. Search for all the sold properties within the last 6 months, and no longer than one year. Look for properties with similar characteristics and square footage. The most important things to look at are: type of construction (concrete block vs. frame - big price differences); number of “true” bedrooms and lot size/location (water access, etc.)If the software doesn’t automatically do it, create a little spreadsheet that will give you the cost per square footage on each property. Get an average of these, and multiply by the square footage of your subject property. This will give you a good idea. I try to get about 5 properties, but the minimum is really 3. This information can come from both the MLS and the Tax Records - the tax records are useful because not all homes are sold through realtors - I’ve found some neighborhoods that never seem to sell through realtors!
Get your realtor to pull ‘sold’ listings in the neighborhood of the property in question and also for like-kind properties (i.e. If you’re looking for the FMV for a 3-unit, also pull ‘sold’ listings for 3-units).
I was wondering if the info. that title companys provide is adequate (I get it for free). Because I use a title company to fax me open deeds & info like that & they also provide comps…is that accurate? They also provide the “low, middle, & high” of the area…which do you go by?