Flipper/Rehabber · Montgomery, NY · Member since 2016 · 2k+ posts · 1k+ votes
8y
That depends on what you mean by "market value" verse "comps". I assume MV means competing with the current houses on the market and what they are asking/negotiating based on. I assume by comps you mean recently sold homes in the area that have closed.
I would personally look at both, but weigh heavier on the most recent comps. I listed a house for $320k and had tons of interest and a first day full price offer. "Market Value" in my opinion was $320k, possibly more if there was that much interest in the market. Low and behold the "comps" only showed it worth $295k. At the end of the day we came to an agreement in the middle, however from my REI eyes, I wish they paid more attention to the actual market and what people want/were willing to pay.
Rental Property Investor · San Antonio, TX · Member since 2018 · 44 posts · 17 votes
8y
@Brian Pulaski, thank you for your response. Interesting, I believe when selling a property we are at the mercy of comps.
Example on Market Value VS Comps:
My Home, Market Value is $160k based off County Records. However a similar home in my area just sold for $185k. So I would say based on the recent Comps I could possibly sell my home for 185k. Does that make sense?
Flipper/Rehabber · Montgomery, NY · Member since 2016 · 2k+ posts · 1k+ votes
8y
County records are not a good place to get a "value" as they are only used for tax purposes. My house has a "value" listed as $140k, but market/comp value was around $200k when I bought. The differentiations I noted above are what I see as "market" verse "comp" value, although others may disagree.
Rental Property Investor · San Antonio, TX · Member since 2018 · 44 posts · 17 votes
8y
@Brian Pulaski, I've always thought that MV was based off County Records but It's definitely good to know it's not. So Market Value is what houses are worth in the neighborhood versus Comps being based off the most recent sold property similar to yours?
Rental Property Investor · San Antonio, TX · Member since 2018 · 44 posts · 17 votes
8y
@Brian Pulaski, now after reading your comments, I think I was trying to inform myself on the difference between Market Price and Market Value. I think I am understanding that Market Value is pretty much the same as Comps in the neighborhood. Thanks.
Rental Property Investor · St. Petersburg, FL · Member since 2017 · 3k+ posts · 4k+ votes
8y
@Gregorio Martinez assessed value and Market value are very different. Market value is based on comps, because that is what people (the market) are paying for properties. To give you an example of how different they can be. My former primary residence is assessed by the township, at $24,000. I close on the sale of it in 2 days at a sale priced of $269k
Rental Property Investor · San Antonio, TX · Member since 2018 · 44 posts · 17 votes
8y
@Jason D., thank you for your response. Also thank you for clarifying the difference between assessed value and market value. This is all starting to make sense, and it sure is good information to have when evaluating a property.
This is all good and valuable information to know.
Do you agree that single family homes and multi-family homes (2-4), are at the mercy of comps? What I owe on my property is different from what Market value is at correct?
So I owe 80k on my home but a similar home across the street sold for 185k, does this mean my home value has increased?
Specialist · Toronto, Ontario · Member since 2012 · 2k+ posts · 891 votes
8y
@Gregorio Martinez
Singles and 2-4 unit multi family are normally appraised by comps.. how much you owe and market value are irrelevant. It is based on how much you paid vs market value..
So if you paid $120k and your similar neighborhood sold for $185k you can say your property appreciated $60-65k. And you can also say your equity is $185k-$80k which is over $100k..
Investor · Cincinnati, OH · Member since 2008 · 319 posts · 243 votes
8y
County tax values are not relevant really a good indicator of market value.
Though you do need to look into the current inventory, what development is happening in a neighborhood, and how many sales occur in that price range compared to # of houses in inventory to get an idea of where you can land compared to the comps. If there is nothing on the market, pent up demand, you may be able to press up on the value of the comps. If there is a lot of inventory, and you want to sell it within 7 days of listing you might have to go down a bit from comps.
Flipper/Rehabber · San Antonio · Member since 2018 · 5 posts · 6 votes
8y
@Gregorio Martinez, Comps are always what you need to base your MV/purchase/resale off of. BCAD is not always an accurate reflection of what a true value is for the property. Ultimately, whether it be for purchase or resale, the appraiser is not going to base his valuation off of BCAD. It will be based upon comparables in the area that reflect the same finish-out as your subject property. Hope this helps!
Rental Property Investor · San Antonio, TX · Member since 2018 · 44 posts · 17 votes
8y
@Jade Florez, thank you for your response.
When evaluating a property based on price, I’ll be sure to not use BCAD as a resource to calculate purchase/sell price on a property.
Now would you use BCAD to get more of an idea of what the property taxes would be?