Andre, I would use the sales price that houses have actually sold for on the retail level. You have a hope to sell for close to that, although it will sell faster if you are a little lower in price,
Yes, you have to consider square footage. That is part of comps. If yours is smaller, then it is worth less, If it's bigger, its either worth more, or it's over-built for the neighborhood.
If there are a lot of foreclosures selling for cheap, make some allowance for that. Those bring down the ARV pretty quick, if there are too many of them. Also, end buyers tend to see the offering prices for those and it changes their expectations.
But if houses have actually sold and closed escrow at a price, then that is the price for the area.
A caveat here: if you are looking back 6 months, you are looking at summer prices. It's now going into winter. Sales slow down. Prices generally go down a bit and then back up in spring. How confident are you in your local market?
Winter is a great time to buy. There are fewer buyers, sellers are eager to sell, and you have time to fix 'er up nice and to be ready for the spring sales season.
I hate to be the one to tell you this, but success in real estate isn't all due to skill with a balance sheet. At the very end, some of it is art and the good luck to be a good guesser.
Nov 02 '09, 03:31 AM
