How do you evaluate a historic house without comparables?

[Brian Sorensen]

I have an bank accepted contract on an REO house for $140k. It's a beautiful old craftsman 4 bdrm from 1910 but it has wood single pane windows, no insulation, and only one bath on the main floor. My agent estimates ARV at $240k but doesn't have any good comparables so she's using her gut to tell her the value of the house.

I brought another local investor over as a potential partner. He looked things over and thought that it would be best to replace all the windows and insulate all the exterior walls and adding a 2nd bath upstairs. I would like to do all that, but the rehab was already at 30k with a new kitchen, new roof, new floors etc, which had maxed the rehab budget. My thinking is that someone who buys an older house like this would be willing to deal with a lack of insulation to keep the authenticity of the house.

He also checked with his own RE agents from another agency who said we'd be lucky to get $200k for it. So he's suggesting to rescinding the offer and submit a new lower offer. I talked to my agent about that and he was reluctant and said the new offer should be in someone else's name.

Any thoughts?

[Dell Schlabach]

An interesting conundrum, what I do if I am in a new area that is hard to comp, I find out who the two top agents in the area are selling similar houses, ask them to run comps and give me their opinion of value. Its been pretty reliable for me in a couple occasions.

If the comps are fuzzy but you have a retail agent who sells 50+ houses in the area in a year, they are the best people to trust on "gut value".

Anyone who sells a few I would be highly suspect, I have seen a couple wanna be rehabbers crash by getting vary bad ARV's from realtors.