Question on comps/appraisals

[Shawn Patel]

I'm about to enter my first two deals. Here's the rundown: 

$70k cash-only home, recently updated brand new LVP, carpet, kitchen, laminate countertops, paint, the attic is unfinished but seller started to board it up, the basement is unfinished but in decent condition, just needs cleaning. Needs a new AC. and the big shed in the back needs to be painted and emptied of old stuff. I would move in right away into this home. It's very very close to turnkey. 

I have comps to support $115k to $140k. My realtor provided these comps and he said these are comps based on recently sold. 

So why is this house priced at $70k? 

My question is this, I see a lot of these houses in the market where it really just needs new flooring, maybe new laminate countertops, and new paint, etc. The max rehab I can see is $20k, and that's pushing it.  What am I missing here or misunderstanding? 

So I visited on-market comparable properties that are listed for $120k, one even sold recently. Inside these homes....LED lights, LVP, laminate countertops, stainless steel appliances. Modern but nothing fancy. Just the right amount of renovation to match the neighborhood class.

I can bring the homes I'm seeing between $55k to $70k up to this comparable home, fairly easily. I'm sure I'll encounter some bumps but nothing major as my inspector didn't pick up any big red flag issues. 

What am I missing here? I should mention this seller is offloading multiple properties, cash only.

[Peter Mckernan]

Quote from @Shawn Patel:

I'm about to enter my first two deals. Here's the rundown: 

$70k cash-only home, recently updated brand new LVP, carpet, kitchen, laminate countertops, paint, the attic is unfinished but seller started to board it up, the basement is unfinished but in decent condition, just needs cleaning. Needs a new AC. and the big shed in the back needs to be painted and emptied of old stuff. I would move in right away into this home. It's very very close to turnkey. 

I have comps to support $115k to $140k. My realtor provided these comps and he said these are comps based on recently sold. 

So why is this house priced at $70k? 

My question is this, I see a lot of these houses in the market where it really just needs new flooring, maybe new laminate countertops, and new paint, etc. The max rehab I can see is $20k, and that's pushing it.  What am I missing here or misunderstanding? 

So I visited on-market comparable properties that are listed for $120k, one even sold recently. Inside these homes....LED lights, LVP, laminate countertops, stainless steel appliances. Modern but nothing fancy. Just the right amount of renovation to match the neighborhood class.

I can bring the homes I'm seeing between $55k to $70k up to this comparable home, fairly easily. I'm sure I'll encounter some bumps but nothing major as my inspector didn't pick up any big red flag issues. 

What am I missing here? I should mention this seller is offloading multiple properties, cash only.

Think this is all prospective on exactly what comps you are seeing. You could be looking at apples verse oranges, not an apples-to-apples comparison. Comparable properties can be very different due to lot size, position on the street, a pool, features of the community, a completely different HOA, and more. Or you could have a seller looking to get out due to the distressed situation they are in. That is all some of the thoughts that you should be having and conversations you should be having with your realtor, or the person that pulled the comps and is representing you.