Is this normal?

Question

I am not new to buying primary residences, but am to investments and secondary properties.

I’m looking in the Middletown/dayton burbs at places now, but I live on the east coast.  We have family there and visit often.

our realtor is only using active listings as comps. I’ve told her I’ve never heard of a buyers agent solely relying on active listings to gauge value for an offer.  A mix of sold/pending/active? Sure, ok. But three active listings and NONE were real comps? What?

Looking at a listed two bed but it’s only one bed (barely- the only legal bedroom is 12x7) legally bungalow. Other room they call a bedroom is 63 sqft and unusable as a habitable bedroom due to layout and below 70 sqft. Priced at 100k, on market 58 days. Not completely updated. No appliances. Systems unknown age. Yard needs TLC. Looks to have some fascia board rot that’ll need to be addressed.

Sold comps within 45 days in this area tell me similar 2 beds sold between 70 and 85k. ALL sold for under list- one was listed at 139,900 and sold for 98. None were less than 5k under list when sold.

the market is trending upwards looking at pending sales but we don’t know what they are under contract for, which is problematic given what we know about the closed properties in Jan and Feb.

My Realtor seems to think the price is justified by sending me three homes active listings as “comps”- one in another town 220 sqft bigger), one legitimate 3 bedroom with a half acre of land and a garage (vs 0.1 acres no garage and no off street parking), and one (have to chuckle) a brand new home essentially- completely 100% renovated inside and out, 150 sqft bigger all new systems.

There are a minimum of 20 real comps. I sent her 8 within 45 days. I’m told I “don’t understand their market and houses are holding value here”

Am I missing something?

Bill B. · Answer

Simply switch realtors. I wouldn’t work with a realtor I didn’t like, much less one that couldn’t understand my concerns. Good luck.

Cameron Valentine · Answer

Definitely agree here, Best to find a new one! But if you're locked into your agreement just simply bring up your grievances and see if they can maybe step down from the contract obligations or even just have them perform better on your behalf.

Cliff Benner · Answer

My headache is actually finding down payments and time to analysis the properties, I 10x my Bookkeeping Business in 1 year and doubled my Candle Business in 1 year so managing them takes me away from Real Estate. For my exact story in the beginning when I had a bad team, check out episode #610 of the BP podcast, I was actually on it discussing my terrible time. Since then I did fire my old team, except my Mortgage Broker, and replaced them. My new PM is great and has good systems in place, the location of my rental is a C- and doesn't get the most attractive tenants but decent ones, while it is also unique, having 4 bedrooms. So this makes me have to Manage my PM a bit more, but an hour a month for that and bookkeeping is worth the $400 in Accounting Cash Flow.

With my current team, I trust them, but verify every detail myself by asking them to provide me their comps and reasoning and then question them if I don't agree with them or understand, as I am an Accountant/Investor, not a PM or Realtor who look at things differently. I created my Buy Box and explained to Tyler, what I want and expect from him and a future property, I asked him to define the location we should look and why. I was upfront with him and told him I want to buy and have him be my realtor for a long time, so if he pushes me to buy a bad place I won't use him again and won't recommend him.

Trust but Verify is key, but as an OOS Investor, it is hard to get an ARV in my head from this market, knowing that the house two blocks down may or may not be a good comp because of how that Market is. I have to rely on my team, which is good because I don't want to waste his time while I am busy, so I don't reach out until I know I am ready to buy something. I just analysis until I am ready.

Tyler Everidge · Answer

Thanks for the mention @Cliff Benner ! Hey @Jennifer Roussel , I will send you a DM right now with my information so you can reach out when you are free. Happy to help!

Obed Calixte · Answer

If that's the response you are getting back, it's best to find someone else.

I can't speak to the market you're looking at specifically-- However a mix, with most weight on sold and pending (if listing agent is able to share terms) and a bit of weight on active is common in balanced and buyer markets.

Review your agreement. You may not have to wait out the entire agreement.

Roland S. · Answer

@Jennifer Roussel not smart to work with people you may not like. work with people with good character, morals, ethics, etc. Kind people.

Cliff Benner · Answer

I invest in Dayton, my first purchase went terrible because my realtor did a bad job on comps as well. I now use @Tyler Everidge, who I found from here on BP and he has done a better job at presenting me comps and his reason for ARVs. I have not used him yet, just due to my businesses have me working more than ever, but I have how he presents his estimates.

Dayton has been very hard to see how the market works, my rental would go on the market for $160k today, but a mile away similar comps can be $100-$250k. It just seems to literally be block by block.

In my opinion it is a Cash Flow market, not Appreciation. even at 7% I am making the 1% rule and could find more in that market that make the same thing but when I go for my next one, I will focus on the area being a better Class and get a little less Cash Flow for less of a headache.

Bruce Woodruff · Answer

I've always used a mixture of 'Actives' and 'Solds'...Solds within 3-6 months. I weight the Solds a little more of course.......but the actives do have some value.

Is this normal?

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