Help me make an offer!
Buying my first 1/2 duplex to be used as a rental property. It has been on the market for just over 200 days. It is listed for $110k. In my area, I could rent it for $1,100 a month. It only needs cosmetic rehab that I know of.
For my numbers to work and to get positive cash flow, I'd like to buy this place for $85k. I feel like because it's been on the market so long, it's priced too high.
This link tells you about the property but I think I might be reading it wrong because it says the market value is in the $50k range.
https://www.bcpao.us/PropertySearch/#/parcel/2423476?sortColumn=account
We offered 82k and the listing agent would like us to rethink our offer before she submits it to the seller.
Here are the comps in the area including the listing I'm interested in.
http://www.flexmls.com/link.html?1g0y08t9kprl%2C15%2C1%2C39632
She told us in the email that the seller paid $127,000 in 2005 for this property and currently still owes more than the offer amount submitted. (I honestly don't know why I'm supposed to care about this.)
Is this deal not going to happen or should we come back just a little higher?
#3 Managing Your Property Contributor
The last one (2419) was built in 2006 vs the others that are 20 years older, so I wouldn't think it is a good comp. the other two sold in 30-60 days in the fall for $88 and $102/sq ft. The one at the higher price has an attached single car garage and is on a cul de sac which will increase the price. the one on the lower end needs some TLC and was bank owned. the active listing doesn't have an attached garage and is smaller than the two comps your realtor showed you, so start at the $88/sq ft or a bit lower as the active listing has been on the market for 8 months. Some places you can look up recent sales in the area to see if these two are the only true comps. As I said the $154K is not a true comp.
Market value on the taxes is the assessed value, not the appraised value. If you put in an offer, you or your bank will have an appraisal done.
It shouldn't matter to you how much the seller still owes. If it is vacant, the longer they hold on to it, the more money they will be paying for it. With a $115K mortgage depending on interest and the length of the term, he's probably paying $1000 a month.
Oh, but first things first: Just because the seller is underwater doesn't mean you have to do stupid. We don't do stupid.
And, the property search link you provided...that market value is used for tax purposes and in most municipalities does not reflect comparable sales value.
As a buyer, you don't pay any real estate commissions so why not find yourself a realtor who works with investors and add some strength to your offer. The realtor can come up with a true market valuation based on current comparable sales - and add in inspection, financing, and other contingencies. Your realtor needs to prepare an offer contract to submit to the seller's agent - with a deadline of less than 24 hours to respond.
The conversation that the seller's agent had with you regarding "rethinking your offer" would never have happened if a realtor was representing you. (And, here's something for your arsenal: realtors are required by law to present any and all offers submitted to the seller - unless a written agreement to do otherwise is in place; and there never is).
Again, you pay nothing as a buyer so build bench strength and go get yourself a good buy!
