Would like to SELL my house in November 2022 Maple Valley, WA

Question

Hi, Everyone!

I'm new here. I'm looking to sell my house this November and would like some advice. I bought it in 2020 for $575,000 and I'd like to avoid paying taxes (legally) which is why I've held onto it this long, and lived in it this whole time.

My question is. How come the RedFin estimate is at $811,843 and Zillow is at $676,100? The house had $112,000 invested in it by the seller that sold it to me. Completely remodeled. New roof (in 2019). 1,500 sq ft 4 bedroom 2 bath rambler with a nice private paved driveway. The house is perfect. Realistically I'd like to keep it and rent it out. But a part of me wants to sell it. Any thoughts or advice? Thanks!!!

All the best,

Alex

James Dainard · Answer

Hey Alex!

As the market begins to adjust to a new normal (longer market times, higher rates, lower demand overall) the automated calculators on those sites tend to get a bit out of whack. The algorithms have a hard time taking into account renovations as you mentioned. It's also a difficult time to comp things. We're having to limit the comps we're using to avoid inflating our ARV's. We're being very specific on the timing of the comps we pull. The more recent the data the better and older comps with purchased on low rates are being tossed out.

If this is your only property and you're able to keep it as a cash-flowing rental you might consider getting another low-down, owner-occupied conventional loan for a house hack or just another primary. After a year of holding this as an investment property, you can 1031 yourself into a better equity and leverage position using renter-contributed funds.

We're finding a lot of good house hack deals on the market right now. The longer market times are helping us negotiate the terms and prices we need to make deals pencil.

You likely have a decent bit of equity sitting in the house that you could access through a HELOC, either for a down payment on the next property or for renovations.

Let my team know if we can help at all!

Armen Agadzhanov · Answer

Aleksandr,

Selling is not the way to go at this time, my recommendation is use it as an investment opportunity and rent it out. I'm in the property management industry, happy to assist with any questions. Let me know if you'd like to connect.

Aleksandr Shmidt · Answer

Thanks, @James Dainard I love the idea of a house hack, actually. Thanks for bringing that up! I'm in sales in the automotive industry for my job. And I feel like the higher gross profits from COVID-19 pandemic market pressure shortages are behind us now. We're not out of the shortage part, but we are out of the higher gross profits part. My income is definitely going lower because of this.

I've been deep diving into creative ways to create other streams of income and recently learned about BiggerPockets, from one of the real estate investing books I've been reading. Maybe you've read it, Rental Property Investing by Brandon Turner. And found out what a great resource this is! For learning more about real estate investing and connecting with like-minded people.

I'm attending your Investor 101 zoom webinar on September 19th. Maybe I could gather some ideas about my next move.. ideally, (I think) at this point I'd like to get myself into a duplex and rent out one of the units. Hopefully on some decent land for the purpose to build another duplex on it and rent the other units out. That way it could be easier to manage while I live there and learn to be a landlord from my experience.

This house that I have is a nice home for a single family. I've thought about bringing in roommates, but that is not my cup of tea. I like my personal space. So I think the best move is to sell and find a house-hack-friendly property that works for me. Looking forward to learning more! Thanks again!

Steve Clifford · Answer

Hey Aleksander,

The Zestimate can be wildly off depending on all of the information that Zillow has about your home. The one true way to get the actual market value of your home is by engaging a real estate professional who is familiar with your market. A Comparative Market Analysis (CMA) of your home should be free from any Realtor in your area. I know I don't charge for mine, however, Maple Valley is a bit out of my service area unfortunately. I always discourage anyone from a for sale by owner sale, as there is FAR more to the real estate process than most people realize. If your Debt to Income (DTI) ratio would allow you to keep your current home, rent it out, and purchase a new home, that's the way to do it. Don't sell a piece of property unless there's a very good reason to do so. That's my opinion at least! :)

Aleksandr Shmidt · Answer

Thank you. I work with Jenifer Hawkins for my loans (she's from Caliber Home Loans) and her sister Kimberly Frighner who is the realtor. They are incredibly knowledgeable and experienced. I was able to secure and close on this property within 30 days, without having a pre-approval ready. They worked quickly! I have a good relationship with them. Kim gave me a value of $750,000 one month ago.

Conner Olsen · Answer

Don't go off Redfin or Zillow or any of those companies. Call a realtor and they will get you comps for free. When deciding to rent or sell, look at return on equity. If you lived in it for 2 of the past 5 years you can sell it and pay no capital gains taxes up to $250,000 if single and $500,000 if married. My guess is selling it is going to be your best option.

Devante Henry · Answer

Use it for airbnb

Would like to SELL my house in November 2022 Maple Valley, WA

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