From the BiggerPockets Blog

 BiggerPockets Blog »

Jump to Forum View All

Click a category below to view different forum categories.

BiggerPockets

General Info

BiggerPockets Q&A, Site Questions, & Announcements

1518 topics, 14426 posts — Last Post 04/20/14, 09:14PM

BiggerPockets Exclusive PRO Area

118 topics, 842 posts — Last Post 04/20/14, 04:40PM

New Member Introductions

10909 topics, 85850 posts — Last Post 04/21/14, 03:08AM

Real Estate Success Stories

396 topics, 6166 posts — Last Post 04/20/14, 09:40PM

General Real Estate

General Real Estate

Buying & Selling Real Estate

5954 topics, 46924 posts — Last Post 04/21/14, 12:32AM

Renters

645 topics, 5825 posts — Last Post 04/20/14, 07:48PM

Get Foreclosure Help - Help Stop Foreclosure Forum

316 topics, 2557 posts — Last Post 04/16/14, 03:58AM

Home Owner Association (HOA) Issues & Problems Forum

237 topics, 1609 posts — Last Post 04/17/14, 08:53AM

Do it Yourself

657 topics, 6296 posts — Last Post 04/20/14, 07:04PM

Reviews & Feedback

Real Estate Deal Analysis and Advice

3688 topics, 29558 posts — Last Post 04/21/14, 03:06AM

Real Estate Guru, Book & Course Reviews and Discussions

1135 topics, 11565 posts — Last Post 04/20/14, 08:31PM

Ask About A Real Estate Company

741 topics, 7327 posts — Last Post 04/20/14, 05:47PM

Real Estate Investing

Real Estate Strategies

Wholesaling

5612 topics, 43779 posts — Last Post 04/21/14, 01:18AM

Rehabbing and House Flipping

3336 topics, 31023 posts — Last Post 04/20/14, 10:33PM

Real Estate Development & New Home Construction

554 topics, 4687 posts — Last Post 04/20/14, 10:21PM

Innovative Strategies

704 topics, 6030 posts — Last Post 04/20/14, 10:54AM

Tax Liens, Notes, Paper, & Cash Flows Discussion

866 topics, 6678 posts — Last Post 04/19/14, 06:06AM

Rent to Own a.k.a. Lease Purchase, Lease Options

695 topics, 4909 posts — Last Post 04/20/14, 05:32PM

1031 Exchanges

143 topics, 1054 posts — Last Post 04/18/14, 08:41AM

Foreclosure Investing

General Foreclosure & Pre-Foreclosure Forums

1689 topics, 11299 posts — Last Post 04/20/14, 10:36PM

HUD, VA, and Tax Sales

415 topics, 3097 posts — Last Post 04/19/14, 10:19PM

REOs

1214 topics, 10578 posts — Last Post 04/20/14, 12:34AM

Short Sales

1535 topics, 13121 posts — Last Post 04/20/14, 02:17PM

Landlord & Tenant Forums

Landlord & Rental Property Questions

7217 topics, 70848 posts — Last Post 04/20/14, 11:43PM

Mobile Homes & Mobile Home Park Investing

638 topics, 5142 posts — Last Post 04/20/14, 08:42PM

Investor Basics

Starting Out

7712 topics, 60534 posts — Last Post 04/20/14, 10:47PM

Investor Psychology

431 topics, 6107 posts — Last Post 04/20/14, 06:04AM

General Real Estate Investing

4720 topics, 37233 posts — Last Post 04/20/14, 11:53PM

Real Estate Investor Marketing

1732 topics, 14098 posts — Last Post 04/20/14, 05:20PM

Commercial Real Estate

Commercial Real Estate Investing Forum

1410 topics, 8994 posts — Last Post 04/19/14, 04:34PM

Multi-Family and Apartment Investing

1111 topics, 9255 posts — Last Post 04/20/14, 09:00PM

The Business of Real Estate

Real Estate Technology and the Internet

Real Estate Technology, Social Media & Blogging

641 topics, 4897 posts — Last Post 04/20/14, 08:43AM

Business Basics

Goals, Business Plans & Entities

831 topics, 7563 posts — Last Post 04/21/14, 12:26AM

Real Estate Finance & Legal

Financial, Tax, and Legal

Tax, Legal Issues, Contracts, Self-Directed IRA

2790 topics, 20034 posts — Last Post 04/20/14, 10:23PM

Property Insurance

309 topics, 2045 posts — Last Post 04/17/14, 07:41PM

Personal Finance Discussion

328 topics, 2732 posts — Last Post 04/19/14, 06:57PM

Loans, Mortgages, Credit Lines

Private & Conventional Lending Discussion

2839 topics, 19730 posts — Last Post 04/21/14, 02:45AM

Creative Real Estate Financing

1210 topics, 8772 posts — Last Post 04/20/14, 06:59AM

Crowdfunding Real Estate

35 topics, 463 posts — Last Post 04/19/14, 06:24PM

Real Estate Professionals

Real Estate Professionals

Real Estate Agents

1211 topics, 7999 posts — Last Post 04/20/14, 03:12PM

Bankers, Lenders, and Mortgage Brokers

441 topics, 1922 posts — Last Post 04/20/14, 07:09AM

Contractors

270 topics, 1685 posts — Last Post 04/20/14, 02:48PM

Local Real Estate

Local Real Estate

Local Real Estate Networking & Recommendations

1994 topics, 11628 posts — Last Post 04/20/14, 07:37PM

Americans & International Real Estate

161 topics, 566 posts — Last Post 04/14/14, 11:19AM

Foreigners Buying in the USA

62 topics, 409 posts — Last Post 04/10/14, 06:27AM

Canadian Real Estate

65 topics, 430 posts — Last Post 04/20/14, 04:56PM

Marketplace

Real Estate Marketplace

Real Estate Marketplace

15028 topics, 53974 posts — Last Post 04/21/14, 03:06AM

Real Estate Events and Happenings

165 topics, 2544 posts — Last Post 04/20/14, 11:36PM

Off-Topic

Off Topic

Off-Topic

2905 topics, 32411 posts — Last Post 04/19/14, 08:03AM

Housing News & Real Estate Market

914 topics, 8351 posts — Last Post 04/17/14, 08:41AM

BiggerPockets Real Estate Investing Summit

97 topics, 1751 posts — Last Post 04/10/14, 02:27PM

BiggerPockets Resources

Forums » Starting Out » specific formula for determining value?

specific formula for determining value?

16 posts by 4 users

Signup


Do realtors use a specific formula to determine the exact value of a home, and/or what it should rent for? I know they look at the houses that sold in the past, etc. but is there anything esle specific that they do?



Inspector


Originally posted by "mouschi":
Do realtors use a specific formula to determine the exact value of a home, and/or what it should rent for? I know they look at the houses that sold in the past, etc. but is there anything esle specific that they do?

Most will find 3 comparable properties that have closed recently to determine value. Rent is determined by the market. I've found craigslist to be the best market barometer of rent.




even then to get an accurate picture, i still need to have access to the mls to see what properties actually signed up to be rented at though, right?



SFR Investor · Wheat Ridge, Colorado


AFAIK, rents are not captured in the MLS. Craigslist is one good source of info, newspaper may be another. We have a list of resources here. Try driving around in your farm area, looking for for rent signs, and calling.


Jon Holdman, Flying Phoenix LLC



so is rent just a completely different animal then? There is no way to tell truly what things rented for, so therefore it is not as a solid thing as setting a price for sale?



SFR Investor · Wheat Ridge, Colorado


Rent is determined by the market. Generally, there's not a lot of negotiation over the rent, in my experience. Either people pay what's advertised, or the don't rent the place. So, unlike property listings, ads for rentals will give you a good idea of the rents. You need to make calls, though, to figure out all the details.

Do a rent survey. Find as many rentals as you can in your farm area. Use all sources, but especially signs. Call them all and pretend you're a prospective tenant. Ask about beds, baths, all the amenities. Ask about deposit. Ask about lease terms. Ask about utilities. Ask if they're flexible on the rent. Notice the intangibles, like is the person hard to get ahold of? Are they a jerk on the phone? Can you understand them and do they understand you?

If you do this for the rentals in the area where you're going to buy, you'll have a really good idea of the real rental situation.


Jon Holdman, Flying Phoenix LLC


Real Estate Consultant


Rent and Sales should follow the same logic as each other. Asking prices for rent and asking prices for sales are the same thing. They each rely on competition. Any agent that uses " sold" comparable primarily when pricing property for sale, doesn't " get it" .

More important than what has happened in the past, is what is happening right now. No buyer will buy a house for $250,000 if he can get the same thing for $230,000...regardless of what has happened in the past...unless they are ill-informed.

In addition, be careful about " sold" data that a realtor gives you from MLS. Most MLS's use final contract price as the indication of " sold" value. However, most MLS's do not disclose concessions, closing costs, builder incentives, etc...

For example, two similar houses could have both closed for $250,000. One closed six months ago and one closed yesterday. The one six months ago was a cash transaction where the buyer paid all the normal buyer expenses. But what if the one that closed yesterday included an upgrade to granite counters at the builders expense, $7,500 in closing costs, a rate buy down of 1 pt, and most importantly, a 60 inch hi-def in the living room?

Doesn't that change the picture a little?



SFR Investor · Wheat Ridge, Colorado


Here in CO, the MLS listing is the only place to find any concession info. It doesn't make it into the public record, but does show up on MLS sold listings.


Jon Holdman, Flying Phoenix LLC




Sign up