Trying to assess property value- Cant find good comp- Max bid?

Question

There is an auction tomorrow in my local area. I am trying to assess the property value of it.

I can't find a good comp. In the Foreclosure auction, there is a property tax value in 2009 of $1700, which puts around 140k which seems like an extremely low price for the property.

Zillow puts the property at 306k which seems high.

I looked what is on the local MLS and it varies from 170k-400k for the same square footage. 
When I look at the same year built it looks like around 280k, but those house look nicer.

Below are the annual property taxes for the house from Zillow

Fewer entries
2010 	$1,693 	-- 	$163,713 	-0.2%
2009 	$1,693 	6.6% 	$164,103 	2.0%
2008 	$1,588 	-- 	$160,886 	2.0%
2007 	$1,588 	1.3% 	$157,732 	2.0%
2006 	$1,567 	-1.0% 	$154,640 	2.0%

Question: Should I base by bid on these rates which equates to a current market value of 140k?

The outside of the soon to be auctioned house good. I walked around the front and back yard. It was was built in 1999. I will go in the inside tomorrow pre-auction.

So I am thinking something like this tomorrow.

(.7x140k)-5k =93k
Typically max price = (70% * ARV) - repair costs.

I just know the house will get bidded for well over that price. The last auction I went to in this town had a large turn out and was a dump and sold for 156k. It was smaller and built in 1900.

Please help.

Thanks

Curt Davis · Answer

In the future why dont you contact a local appraiser and kick them a few bucks to give you an idea of the real value of the home?

Bill Gulley · Answer

And, if you or the appriaser can't find good comps, then I suggest you walk....regaredless of your startegy, I don't believe getting into any property that is not marketable to the next guy, with them obtaing conventional financing.

Account Closed · Answer

Yup auctions can look good at first glance but properties usually end up selling for 80%-85% at FMV if not more sometimes.

Account Closed · Answer

J is right and property tax assessment isn't a good way to asses the value of a property, because it could be (and usually is) relevant to previous years (like 2006) where the market was in a total different form than what it is now.

This reply is probably a bit late but judging by the information given here, this specific house is worth the min amount of 140k unless it went under some unusual disaster. Built in 1999 it wouldn't need too many repairs and upgrading. I doubt that it went for less than 140k. Let me know if I'm wrong...

Steve Babiak · Answer

Since it seems you were intending to rehab and then re-sell this (flipping it after rehab), then Bill's advice here is spot on.  If you can't find a comp and you're certain that you have tried all possible ways of locating a comp, then the appraiser won't have any better success when you go to re-sell.

And your only comps just might be limited to distressed sales if that's all that is selling anymore in your area.

Brandon Pearsons · Answer

The ending auction price was 226k

Brandon Pearsons · Answer

Hello Ty, and J

Thanks for the info. The auction is actually in about 30 mins, so I got to jam over there soon.

I just went inside the house. It needs paint, all the rooms are different colors, the carpet has been pissed on by the dog, the owner kicked a couple holes in the wall. The furnace does not work, I tested it. It needs a stove,fridge and washer and dryer as well.

Im factoring 10-12k for all those things..

Others looking at the house could not find any good comps either unfortunately the range looks like 180k-250k after rehad

J Scott · Answer

No, using property tax or assessment data is NOT a good way to determine the resale value of a property.

The only good way is to do a thorough analysis of sold comparables in the previous several months and within a small radius (less than 1 mile, ideally).

By comparable, we mean:

- Similar size
- Similar construction date
- Similar condition
- Similar construction type
- Similar # of beds and baths
- Similar surrounding area (for example, is it in a subdivision or not)
- Similar amenities

It sounds like you don't yet have a good grasp of how to analyze comps, so I would recommend doing some study in this area and/or finding someone qualified to help you out.

Brandon Pearsons · Answer

Please help friends.. The auction is in a couple hours...

Brandon Pearsons · Answer

Thanks.. .This is a college town as well, but this property is outside of the college area.

I guess the bottom line of my question is... current property tax a good way to determine the value of the property?

Trying to assess property value- Cant find good comp- Max bid?

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