Using Active Listings to Comp your Flip Deal
A used tire with rim for $20. A Pac-Man pocket watch for $140. A size 20 wedding dress for $75. And I can’t leave out the Italian Murano glass lamp for $100. These are just a few of the active listings on CraigsList.org here in Phoenix.
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How does someone put a price tag on a Betty Boop purse collection or a cow skull with a hand painted eagle design on it? These are all truly one-of-a-kind items.
Thankfully, in real estate there are usually enough comparables in any given area to determine the value of a piece of land, house, apartment or commercial property. Buyers, along with their Realtors and appraisers, will be fixated on closed sales within the last 90 days. Secondarily, they’ll consider pending sales in the area.
However, an often overlooked but useful value indicator, at least for us real estate investors, is active listings.
Think about it for a minute. What’s the first thing a Realtor will do once their buyer has determined what kind of house they want and where they want to live? The Realtor gets on the multiple listing service and does a search for all active listings that fit the buyer’s criteria.
These active listings will be your competition once your fix and flip deal is ready to list.
Some of these listings will likely be beat up short sales and bank owned homes. A few may be traditional sales or remodeled flips. Regardless, buyers in the market for a house like yours will be looking at these active listings. How does your property compare?
Before you make a final determination on value for a fix and flip deal always review the active listings in the area. How many are there? How many are like yours? How many that are like yours are traditional sales or remodeled flips? Do they have similar features and/or upgrades?
Remember, this is not an exact science. Active listings won’t tell you what your fix and flip deal is worth, but they will give you a good idea of what it isn’t worth.