I have a list of REOs, which ones should I get comps for?

Question

Ok, so I've been struggling a bit here.  I recently received a list of REOs in my area.  I've been trying to find similar properties that have sold recently and I am unable to find a single comp for the 30 listings I have access to.

Ultimately, I will need to request comps from my realtor and perhaps a title company.  However, I have a much more fundamental question...

How do I decide which of these properties I should get comps on?  I really don't want to waste anybody's time by asking for comps on everything.  How do I narrow down my search?

J Scott · Answer

Go look at several hundred houses that are for sale in the area you're interested in working and track their ultimate sale prices; that should give you an idea of values in that area.

Without access to historical MLS data or someone who has it, it's your best bet, though it will take a good bit of time and effort.

Truett Neathery · Answer

Mr. Graham, as of now, you are on the outside looking in. You will need MLS access. Assessor's data will not be adequate, neither will Zillow. Getting the very minimum licensing will be costly and take along time to implement, and there are MLS fees, Association fees, NAR fees plus whatever your state association requires. (Of course you don't need to be a REALTOR - simply an agent will probably suffice) Your best bet is to ally yourself with an appraiser that has access to MLS in the areas you are looking in. If you ally yourself with an agent, he may steal your deal. Sounds like you are intending to get into business with no knowlege or liability. If that works, fine. But it sounds like "curbstoning" in the used-car bizz.

Stacy Dieckman · Answer

Mikel,

I think you should only do research on properties for which you have exit buyers.  Your buyers will tell you which areas and how much they will pay.

I have a question.  If the property is already listed as an REO what role are you playing in the transaction?  How are you putting the deal together?  Thanks for sharing your process.

Stacy

Jerry R. · Answer

Scott's right on the money.

It's good to know in advance what the current homes values are in the areas you are interested in. Then when you get new REO listings you will have an idea how realistic the price is.  Some will start off listed high and will just need to sit for a while before the bank gives them up.  Others will be listed more realistically and may go pending fast. Where I am that may be 1 day. This not not give a lot of time to research a bunch of comps to determine if I want to submit an offer.

Greg P. · Answer

Yes, it can be done, I wish you the best.  Good luck.

Mikel Graham · Answer

Thanks for the reply Greg.  I appreciate your advice however, I know that this can be done without the license or full access to MLS.  Granted, I also know that the way I'm doing it now is going to take that much more effort and diligence.  Now, don't get me wrong, I'm not saying that I'm not open to other paths, however, I wish to close my first deal within the next 4 weeks (or at least have 1 property under contract).  It's simply not practical or possible to obtain a license and still meet this goal.  Ambitious?  Yes, but I believe and know it's possible.

I will definitely look into the courses and books alongside my pursuit.  In the meantime, I'm going to continue moving forward and gaining as much real-world experience as possible.

Thanks again!

Greg P. · Answer

Well, I can tell you have a long way to go, but don't give up.  First of all, you need MLS access period.  Either get a limited broker's license or get your realtor license.  The way you are doing it will take too much time, and by the time a real deal comes out, then you will lose it to someone who is quicker.  You can try lowballing properties that's been on the MLS for awhile, but you will still need to know the general idea of where the price needs to be.  Pick up a course or two, like Preston Ely, Cris Chico or the book from Tony Alvaraez, but don't be a info junkie.   Don't go over board with the courses though.  Just buy a book/course or two.  I can also private mentor you for $10,000 :).  I'm just kidding, don't fall for the expensive mentoring crap that's out there right now, learn from the cheap courses and books.  Oh, and Biggerpockets of course.

Mikel Graham · Answer

Well I'm actually a budding wholesaler, consequently, I'm not limiting myself to any particular area.  I will have a look at the properties tomorrow (just got the list today).

Some advice on how to narrow my selection would be appreciated.

Andrew Jones · Answer

Are all 30 in areas you are intrested in? Have your drivin by these houses? As far as not wasting realtors time well if your a serious buyer then your not wasting there time with questions.

In my area reos that are priced right sell within two weeks so you have to move quickly and know the prices of the areas your intrested in.

I have a list of REOs, which ones should I get comps for?

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