11-16-2012 12:36 PM
I am first time home buyer-
I know a house is worth what you are willing to pay. But in my situation I can hardly come up with number as thngs are confusing.
I like a condo listed at $490/sq feet..
We(I and agent) did CMA and $/sq footage was $330- $368. Some had renovated kitchen/bath which this property clearly lacks. My agent thinks $450/sq feet should be FMV as this is highly desirable neighbourhood and houses dont sit for a long in market. I dont feel my agent is doing her job as she seems have interest in just getting the deal done.
I still feel this is ridiculous over priced as all the units have more or less same floor plan and square footage.
My question- Is there any other way I can find out how much the house is worth for before I put in an offer.
11-16-2012 01:46 PM
A CMA is probably the best way to determine market value but it is far from a perfect science. Typically you are using comparable sales as an indicator of current value. In a market that is rising or falling, looking at past data may be less effective in determining a realistic price. When the real estate bubble was forming back in the early 2000's appraisers (who use a similar method to the cma) were potentially not taking into account the increase in inventory and were justifying values by past sales. Alternatively, in a market with a very tight inventory, it may be more difficult to justify the actual market value based on comparable sales in some areas. If there is nothing better available on the market in a particular area that is priced better, it is more likely that someone will pay more than what comps may justify.
In this case, you should certainly look at the cma from your agent. If you don't trust your agent, you should select another one. I would also take a look at alternative properties that may be a better deal. Redfin shows virtually every property available so this transparency makes it possible to make an informed decision.
781.462.5317 | Charles.Vallis@redfin.com |See all my deals & reviews
12-03-2012 02:23 PM
Square footage, especially in small homes in coveted neighborhoods, may not play into price all that much.
An appraiser will do this (and so it might be helpful to you as well):
Look for 5-8 homes that have sold within the neighborhood (or a local equally desirable one) in the last 3-6 months and are in similar condition.
Try to imagine what a buyer who would consider the home you are considering would ALSO want to buy - perhaps, even, consider what else you yourself have considered.
Look at squarefootage - but also at room count (especially bedroom and bath), building amenities, view, finished basement or attic space, neighborhood location (busy street? side street? corner lot? transportation nearby?), decks, porches, fireplaces, parking, age of fixtures, quality of materials, usability of space, number of floors from the ground and strength of association (in a condo), etc. Appraisers will generally discard any sale that must be adjusted by more than 15-25% from price to be "comparable" to the subject. No one item generally amounts to more than a 10% adjustment, and adjustments are drawn from the market data in your immediate area.
Toss out any that don't seem to work. Keep the ones that adjust most closely.
Once you find 3 or 4 properties that you think would be MOST likely to be considered as similar by similar buyers, try to take a weighted average of the sales prices (accounting for anything that might make one a lesser than another, such as a harried or bank sale). Make sure you are not overly critical of either your chosen property or the comparable sales - be objective.
How far off is your assessment/average from the agent's? Is your price the one that would make you GENUINELY consider the sale property equally with the ones that have already sold (since your adjustments should make them "equal")?
ALSO - genuinely consider that in a popular neighborhood, your competitors may be willing to "overpay". Decide whether your property of choice is scarce enough (how many do you find like it? Will there be another one soon?) to do the same? Decide whether you think you will be crushed upon losing it, or simply wait for the next one to come along? Factor that into your decision rationally BEFORE the bidding begins. Know how much you can/will/want to spend on this place before go to bat.
If your agent does not see things the way you'd like him/her to see them, despite having a professional conversation about your needs/values/desires, you may need to consider another agent. Get a second opinion, especially if you do not feel that your agent is working in your best interest.
That said, if after agent shopping, several professional agents who are familiar with the subject neighborhood echo the thoughts of the first one . . . or if your offer goes unreturned because of the discrepancy between your offer value and the list price . . . you may need to reconsider your metrics.
Best of luck!