house with great comps but POOR condition

[Jennifer Lee]

Hi BP

I have found some homes that have everything going for them but their condition is rough.

Hypothetical scenario:

ex. in an area that 4 bed room are RARE.

a home pops up at right price if GOOD condition ( 220K) JUST LISTED

There are basically no comps for them b/c most home are 3 bed (let's say)
or tiny 4 bedrooms (3 plus nursery)

to get 4 bedroom you have buy the BIG homes, or NEW homes, right now. (300-600K)

How would you proceed to make an offer?

Of course, seller are hoping for first time buyer that will love and work on their home. (which will happen here, and does)

but as an investor...how would your proceed with this scenario?

1. Wait a few weeks to see if it's still around and then move in
2. Offer 70% ARV-repair, nothing to lose?

The comps I have been pulling for these scenario are
ex.
the Property (lowest price) 175K
Good condition $275K (may be better location, no comps closer)
New 400K

BUT it's not the biggest house on the block. just no current comps

but it will never be 400K b/c it's in older neighborhood, not the brand new with side walks and clubs.

how will the bank's appraiser deal with this situation?

I've never appraised a home, do they take condition to consideration?

thanks in advance

[Mike G.]

I don't see what waiting gets you, other than the possibility that someone else will buy the house. I'd say make the offer now. If they don't like the offer and reject it, then check again down the road to see if it's still available and offer again.

As for determining the resale value, the appraiser looks at all kinds of things. If you are unsure about the repaired value, I would suggest consulting with a competent agent who is familiar with the area.