Posted by Jim Beavens on June 07, 1999 at 16:26:25:
Several weeks ago, I made several offers on vacant houses that were listed through realtors (all turned down, of course). Just getting back from Atlanta all pumped to do deals, I hopped on to the rmls.com website for my area to see if any were still listed before calling the realtors to follow up. Two are still listed with a realtor that never gave me comps, but instead simply gave me her estimate of the ARV.
Before calling her to follow up on these, I hopped on to the Orange Coast Title Company website to see what comps they had (keeping in mind Piper’s and others’ suggestion that they may not be entirely accurate). One of the properties had comps lower than what the agent said the ARV was (as expected).
But this other property is the only one located on the west side of town, almost but not quite into our west hills, where there are some very prestigious high-dollar neighborhoods. It’s a daylight ranch on a sloped lot, with the front entrance on the main upper floor and the rear door to the backyard being on the lower floor, which has a very large family room and one of the bedrooms. The listing says it has 2300 square feet total, 1150 on top and 1150 on bottom. It also has a pool in the backyard filled with muck. It’s a slightly older house, built in 1950.
The agent had said that it was difficult to pin down an estimate of value because the comps were all over the place, but she came up with a rough ARV estimate between $169K-189K. My feeling was that the value was towards the higher side of this range, so based on this and based on a somewhat conservative repair estimate of $25K, I offered $105K several weeks ago (it was listed at $147,900).
Now when I pull comps from this title company’s service (which of course need to be verified), I find some interesting things. The tax records show this property as only having 1150 total square feet, with a seperate entry for the basement square footage of 1150. So when I ask for comps, it pulls several houses in this square footage range (which also have seperate entries for basements in the 600-900sf range).
Here’s what those comps look like:
Year built: 1950
Sq Ft: 1150 (basement: 1150sf)
Year built: 1945
Sq Ft: 1321 (basement: 667sf)
Sale price: $220,000
Date sold: 5/7/99 (this was after my original offer)
Year built: 1956
Sq Ft: 1383 (basement: 928sf)
Sale price: $252,880
Date sold: 5/24/99 (two weeks ago!)
Year built: 1965
Sq Ft: 1419 (basement: 744sf)
Sale price: $240,000
Date sold: 10/22/98
So now I’m beginning to wonder if the agent is underestimating the value of this house. I’ve already faxed all the info home to my wife so she can drive by the comps and bring up the property at the courthouse, but I guess my question is how likely it is that the listing agent would significantly underestimate the value.
And if I do decide that the house is worth more, I’m wondering how it would look if my followup offer is significantly more than my original offer. The property is an REO that the tax records say was transferred to the bank on 2/11/99 for $134K. I don’t think an offer of $135K would be too shabby of an offer for this property, and would probably be seriously considered. But I don’t want to tip off to the listing agent that the house might be worth more by offering so much more than I did originally.
I’m going to jump on this ASAP, but now that I can take a breath I thought I’d post the details here and see what folks thought.