comps

[Richard Stephens]

Hi Everyone,i have a question on what to offer on a house that the comps fluctuate from $100k and up,no two houses are alike,a rich area like the house im thinking of thie asking $223k needs about $50-75k in repairs and the house next to it is $350k house across the street is $450k on tax records.This would be a great start for me! Please any sound advice would be greatly appreciated.

[Thomas Franklin]

@Richard Stephens The reasons why Comps fluctuate are due to differing layouts in terms of the number of bedrooms and bathrooms, total square footage of living space, quality of interior (updated kitchens with stone countertops, stainless steel appliances, updated bathrooms, type of garage if any, etc.) that varies from market to market. When I encounter a wide range of Comps, I take the Sales Price and divide it by the total square footage of Living Space that provides me the price per square foot, for each Comp. If I have three Comps, i determine the average of the three Comps, in terms of price per square footage. In my opinion, this is a logical and justifiable way, to to determine the offer price. 

In conclusion, it is important to know what the neighboring properties have, in terms of the quality of kitchens and bathrooms, as these will give you the biggest bang, for your money. I never advocate going overboard, with rehab, but it is imperative that you have knowledge of what is inside surrounding homes, so you can rehab a notch above and hopefully generate a quick Sales Contract, with PRE QUALIFIED BUYERS ONLY.