I had an appointment today with a motivated seller but we were way off on the price. The house is almost 2800 sq ft and is listed with the city and on the MLS as being a 4 bed/1.5 bath house.
After meeting with the seller and looking at the house, I can see that this is actually a 6 bed/3 bath house.
My comps have this house at about $200k for the ARV but the seller is looking for $225 for a cash offer. My question is:
How much do additional baths and bedrooms increase the ARV when putting together an offer? Is there a formula out there that anyone uses?
Please let me know if you need any additional information.
Cheers and happy wholesaling,
1) use comps
2). Anke sure the additional beds/baths are permitted.
If the house is worth 200k and the seller is looking for a 225k cash offer they don't sound very motivated. They sound unrealistic. It will take more than an extra bedroom and bathroom to make this a deal worth pursuing.
@George Steers Look at comps but from an appraisal standpoint, 5 beds vs 6 doesn't make a price difference due to similar utility unless the market reacts for 5 vs 6 bedrooms but i dont see that. Bathrooms warrant a $4-5k adjustment in this price range.
Thank you, everyone for your replies.
The seller has some strong motivation to get out of the property but was given some poor appraisal advice. He's leaning heavily on the extra bed and bath situation to justify the unrealistic price.
I feel somewhat obligated to set the record straight for him, even if I don't get the deal, and wanted to have some figures, explanations, etc. to shore up my argument.
Most likely I'll be happily moving on to the next one.
Cheers and have a great night.
Generally I don't comp on Beds. I know sacrilege... Bring on the trolling..... (I use SQ feet, because a house has 1500 sq feet and 3 beds or 1500 sq feet and 8 beds are two totally different animals and bring on different buyers.)
I do comp on Baths (but your area will vary widely from mine or anyone else because it is location specific).
So I recommend finding out the values in your area.
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