Posted by Fran CA on February 23, 2001 at 22:16:00:
Hi Amy,
First thing, don’t look at the Tax Assessors number for comps. They, depending on the area you live, can be very low. In California, they have a law in place that states once you purchase the home the assessors value never changes. Taxes may change, but the amount you are actually taxed on doesn’t. So don’t even bother looking for comps there.
My best suggestion for comps is http://www.titleadvantage.com/. I have been using them to run the comps on the properties I am talking to people about. Also, this article is very informative about how to figure what the comps are in the area of the home you are looking to acquire. It is http://www.real-estate-online.com/art-132.html. I have found that by doing my comparisons that way it really takes the guess work out of it. The numbers are right in line for the sales in that area.
Sorry I can’t help you on any other questions. I am still very new to this, but I am getting more confident with each passing day.
Posted by Amy Rob on February 23, 2001 at 16:12:48:
okay, we did it. We got off our butts and actually went out and looked at a property. Found a relatively nice fsbo-28 yr old 4 bdr home on 1/2 acre lot in a well-kept up neighborhood. They bought it new and lived in it 10 years then rented it out for 18.
I am not under the impression they need cash, and are open to a sandwich lease. They live out on the lake now. They are don’t-wanters (don’t want to be landlords any more-although she did mention it immediately rents for $1000 every time she’s rented it) When the last folks moved out they replaced: carpet, stove, roof, deck, heat & air units, vinyl floors, sinks, toilets etc.
I don’t think their asking price of $119,900 is unfair, but want some advice. We have a call in to them now asking if they’ve had it appraised and if there is any existing financing. Tomorrow we are going to drive their neighborhood looking for comps. The property assessors office is closed and I think the assessment I found online has to be old.
Here’s my idea: I’d like to fax over a letter of intent (feels comfy) with 3 offers or so: “We’d be willing to purchase your property under any of the following scenarios.” I of course want to put no to low cash down, and none of our own financing on it at this point. I thought if we gave them some choices (they may be open to owner financing if they realize how much they could make in interest) and negotiated terms then I think this can work. If we offer way less than $119k but with interest they get way more than the $119k then that might work for them. (Would we then be able to take an equity loan out with another lender?)
If we offer $800/mo payments and lease out for $1200/mo making the sale price higher (and down payment) than what we agree to pay them; etc.
Would someone please give me some examples of how we could structure this and of course how to word it to the seller, I would feel a little more confident. The meeting with her at the house went great and I think we all felt comfortable with each other, so I think if we can agree on terms, it’s a go.
Thanks so much for your time, and I hope to fax them the first letter of offers asap. PLEASE let us know if we are forgetting something!
Re: Need help on our first offer - Posted by Charles Steed
Posted by Charles Steed on February 24, 2001 at 11:20:38:
Amy-
You don’t have enough information to make an offer yet. You need the comps first. As Fran said, assessed value is rarely an accurate reflection of market value, so don’t put much weight in that.
You need to find a savvy realtor, describe the house and neighborhood you’re considering and ask if recent comps will support that price. They have computer access to all the local records. Tell the agent you’re looking to buy an investment property and you’re trying to become familiar with the market. You might want to get several agents pulling comps for you. You’ll accomplish two things this way. You’ll be learning the market and making valuable contacts.
Finally, submitting three offers might work well in seminar land, but in real life it tends to confuse most sellers. Remember, a confused mind always says no. If the comps check out, sit down with the seller and determine exactly what she needs. When you’ve done this, write an offer that reflects these needs as well as your own. I realize this is much more intimidating than faxing an offer, but infinitely more effective. BTW, what are our plans if you get this house?
