In considering the price to pay for a property , the first step you must take is to know the ARV ( After Repair Value ), of a property . Of course there are other costs to consider in buying and selling but it all starts here … The value of the property .
How Do I Know What A Property
Is Worth ?
Question : “ How do I value the property I am interested in ?”
I want to start by sharing that comps , or comparables , are regarded as the singlebest tool in determining a home ' s value . Comps will compare criteria from recentlysold properties in a neighborhood , such as sale price , age of house , size , and square footage and come up with an average value based on these elements . I like to look at the last 90 days SOLDS and use ½ mile radius at most when considering comps around a property I am looking to value .
On a side note , for easy online access to the information I am sharing here anytime , go to Realty411 . com where you will find a ton of other FREE tools and resources catering to real estate investors .
So … back to the original question …
Answer : COMPS !
You need to use comps to come up with value . This is what the banks use to come up with how much they loan . This is what appraisers use . This is the common way to come up with base valuation of property .
2nd Question : So the next question I get is , “ Where do I find good comps ?
Some of you reading this might be a REALTOR ® and have easy access to comps .
However , others who are not REALTORS ®, finding good comps is not so easy . And I know I hated to bother my real estate agent to have to look up comps when I am making 20 + offers a day .
2nd Answer :
So here ya go … here are some free resources that will help you in getting started in valuing a property using some simple online tools .
NOTE : Most of these sites include the value of a mortgage when it goes into Foreclosure as a sale , which can make these numbers skewed from facts . Be aware of this . However , these are good starting points and can be used in your initial evaluation .
• Most popular – Zillow –
By Tamera Aragon
www . Zillow . com who owns the term , “ ZESTIMATE ”. You just type in the address and their value comes up . If you want to learn how they come up with their Zestimate , go here : www . zillow . com / wikipages / WhatisaZestimate
• NEW – In Beta Form Find Comps Now – www . FindCompsNow . com Seems to utilize Zillow yet lists the properties used to come up with estimate , but adds some interesting features like separating out the cash buyers ’ purchases from those who were purchased with mortgages .
27