How to Determine Property Values and Buy With Confidence

One of the scariest things for first time investors is taking that first step and buying that first property.  Oftentimes, I hear from people that they are so nervous about making a mistake on the valuations that they fail to take action. 

In today's world of technology, it's easier than ever to find out a properties TRUE value and feel confident that you're getting a good deal. 

If you have access to the mls this is always the #1 choice for verifying values, but let's assume you don't.  What are your other options:

1) Do a quick search on zillow.com - zillow is more accurate in some areas than others and they've certainly improved over the years.  You can pull up a map and see what houses are listed near by and even which ones are in pre-foreclosure and foreclosure.  

Keep a few things in mind whenever comping (finding comparables to determine value).  You want to look at houses that are similar in design & construction.  In other words, a 2 story brick house is not comparable to a 1 level rancher with vinyl siding, even if the ranch house is twice the size. 

Look for similar SOLD properties - compare 1 levels to 1 levels, 2 levels to 2 levels, etc.  The square footage should be close and the beds and baths should be close.  Remember, you're looking for the price of the sold properties not the listed ones. 

Then, look at the pictures of the house from when it was listed.  Does the interior match the house you're buying or does it have a fully rehabbed top of the line kitchen that will cost you $25k to duplicate?

Next, drive the area with a list of actives & solds in hand to get a feel for what the houses look like on the outside.  This is particularly helpful when you're just getting started and don't know the areas too well.  The difference between one neighborhood and another can be a substantial price difference.  

One may be more run down and have no amenities and a very lax HOA.  The next one may have a park, tennis courts, strict HOA rules, gated community, etc.  

Looking at them can make you feel more confident on your first few purchases.  

Besides zillow.com I also recommend free sites such as:

Realtor.com

Redfin.com

homes.com

trulia.com

If you really want to get great, mls quality comps, then you can look at some of the paid services such as:

realquest.com

netronline.com

dataquick.com

If you're doing your due diligence at some point you have to trust your instincts and go for it!