My First Find but the price is more than the appraisal ask

[Arun Kumar Balasubramani]

Hi,

I found a Single family home with basement finished and separately rented. Its 1200 each with 3 bed and 2 bath. For some reason the seller is selling that 40k more than the Zestimate price. He says its going to be more than the appraisal value as there is lot teardown is happening and the valuation is not appropriate.

I check couple of other houses in that areas , Those were also overpriced from zillow estimate.   The rental number works out great. its 240K house and the rental potential around 2400( 1200 each). The Zestimate is around 200K.

Any thought would be much Appreciated.

[Taylar Caraway]

Ignore the zestimate. You have to look at the area comparables. The zestimate is basically a computer algorithm, it doesn't know the condition, features, etc of the house and can only guess the value based on the information the computer gives it. 

Your best bet is to look at comparable properties in the neighborhood and compare apples to apples. Pay attention to what price homes are SELLING for in the neighborhood, not necessarily what they are LISTED at. Once you see how homes are selling, take a look at the price per square foot and see what valuation you get. Keep in mind though that a finished basement will not be valued at the same level as the above grade area.