Well, one approach would be to take the price it sold for new in 1989 and pay the equivalent of that selling price ($195,000 1989 dollars) in today's dollars.  I calculate that value to be $334,000.  That equates to $191 per sq foot, which is $10 per sq foot higher than the sale comps but right on the listing comps.  Of course, since the house is a fixer upper, I would subtract from that inflation-adjusted price the amount you would need to spend to get it in a livable condition.  The pictures don't tell us much, so you'll need to figure out what your guess of that number is.  Since this is a price level where investors will likely be in on the bidding, I would also research rents in the area and consider a price that's around 15x annual rent as another barometer of value.

That all being said, I know exactly zero about that area in terms of the quality of schools, crime, etc.

Thank you, PABuyer!!

The house next to it recently sold for $400K on 10/09. The house renting average (3beds/2baths) in that area is between $1400 - $1750/ month. 

FV at $209K is hard to believe since the buyer is asking 25% higher from prior sale which is a few months old.   Since you have access to the information, you should ask the seller why its 25% higher?

Or are they in it for a quick buck!  

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TomP wrote:

FV at $209K is hard to believe since the buyer is asking 25% higher from prior sale which is a few months old.   Since you have access to the information, you should ask the seller why its 25% higher?

 

Or are they in it for a quick buck!  

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TomP - I think it's an REO and the "sale" you're referring to is the foreclosure sale

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PreFabHome wrote:

Thank you, PABuyer!!

 

The house next to it recently sold for $400K on 10/09. The house renting average (3beds/2baths) in that area is between $1400 - $1750/ month. 

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So based on the rents, value would be in the range of $250 to $315k.  Even if the homes were identical, I would not be willing to pay up to the $400k value of the house next door based on the fundamentals of the property.  Based on the info provided, I think you would be able to sleep soundly with a deal at $250k, and I would not go above $325k.

If the June 2009 sale amount of 169K is associated with foreclosure, does that mean that was the amount owed to the bank for the home ? I suppose not - because if the fair value of the house is greater than amount owed, then the previous owner would have sold the house rather than foreclose.

Does it mean the previous owner owed additional amounts on secondary loans/HELOC etc such that total owed is greater than what he can get for the home ?

Thanks.

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newbiehere wrote:

If the June 2009 sale amount of 169K is associated with foreclosure, does that mean that was the amount owed to the bank for the home ?...

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The bank can begin the auction at whatever price it wants, and in this market that is often substantially lower both than the amount owed and the retail price of the property, since if the bank acquires the property and sells it retail it will net only the final price minus substantial transaction costs. I think RealtyTrac's number on this was around 60% of loan redemption, lasttime I saw it.