Receiving different market prices for an apartment
I'm looking into investing into a specific apartment. It hasn't been publicly listed as for sale yet, I just happen to know the current owner. The owner asked me to do my own research and make him an offer. The owner has a number in mind, but for now he wishes to keep that to himself.
I got two different local realtors to look the apartment up and visit it on-sight with me, to tell me how much they'd value the apartment at, so that I could look into making an offer if it would make sense as a function of loan-payments, maintenance, bills, rental income and so fourth. I've heard that realtors normally don't handle price evaluation but it seems to be the norm where I'm from (Iceland).
I made it clear that I wanted to know the market-value, not how low I should necessarily offer if I were buying or how high I should sell if I were selling. Both ended up knowing that I were considering buying but I focused on getting to know the market value of the apartment. They happened to give me offer suggestions as-well which were in their recommended market-value ranges anyway.
Realtor A said the apartment should be valued at $162k - 170.6k and that I should make an offer for the lower amount and not accept anything above the upper limit of this range.
Realtor B said the apartment should be valued at $203k - 211.3k.
Both realtors are used to buying and selling houses and apartments in the area. Neither one has any connection to the seller. After the evaluation I told realtor B about Realtor's A evaluation and while he didn't exactly agree with it he did say that I could attempt to make initial offers at Realtor's A range (upper-limit) and see how the seller responds.
How do I determine the actual market value using these very different ranges? Do I need a third valuation? The gap here seems to be quite high. Do I just take the median value?
The place could be rented from anything between $1381 - $1585 in its current situation. Its unlikely that any deal I can get out of this would go above the 1% rule but it would be possible to get anything from three quarters close up to the percentage in a best case scenario. I'd be taking a mortgage for ~85% of the purchase price.
I'm a first time investor, just having read the ABCs of real estate investing and I'm going through Brandon Turner's "The book on Rental property investing". I hope you can help me understanding how to go about this gap and perhaps where you'd make your offer knowing these ranges and rental ranges. Thanks! 😊