How to measure value?

[Keith Hackett]

1. https://www.zillow.com/homes/1840-Palamino-Dr-Clar... (Mortgage $767, is in worse school/ higher crime area, is brick built in 1985, more square footage and room for upgrades like back yard fence) clearly newly renovated 

or

2. https://www.zillow.com/homes/515-Oakmont-Dr,-Clark...

except for property #2 515 Oakmont is $124,000 (Mortgage is $820, smaller square footage, developing area with less crime and better schools, built vynil in 2008)

My questions are is brick built so much better than vynil that 23 years older is better or worse?

It will be a VA loan so no money down on either.

We will personally pay down mortgage for 1-3 years while stationed at Fort Campbell.

PLease help assess and advise as to why you would choose one over the other. 

515 Oakmont is closer to fort campbell but not by too much more.  The two properties are within 5 miles of eachother. We have looked at property number one and view proprty number two tomorrow afternoon.

[Account Closed]

As far as "how to measure value"

One comp does not a market make. You need to look at more data.

List prices reflect seller desire, not a meeting of the mind between buyer and seller.

Closed sale prices are a fact, however reflect what one seller and one buyer have come to terms on. What the next pair might come to terms on is usually different. Ask any agent if the 5 offers on the table are all the same price.

Real estate is not precise, though we all desperately wish it was.

People don't really pay more for a bathroom and less for brick siding, per component, like the stupid mortgage appraisal everyone is familiar with suggests. Rather, they tend to pay more for more and less for less, as a function of the whole. The result there is, there are no absolutes.

And so therefore, the most "accurate" way to value real estate is with a range of value, not a single point of value.

For instance, it would be more "accurate" to say a property is worth somewhere between $100k to $125k, than it would be to say it was worth $100k, or to say it was worth $125k, or to say it was worth $112k.

That said, in the above scenario, $100k, $112k, and $125k are all "accurate". 

Learn your typical range, and you have then identified your typical margin.

Buy at the bottom for a good deal, buy at the top for a not-so-good deal - both are market value.

Buy below the bottom for a discount, buy above the top for a rip-off.

Wouldn't it be nice to know the difference?

Yet, somehow, people use the mortgage appraisal to satisfy the contract contingency all day long. But I digress.