Loan to value? Where do I find that?

Question

So this is my first post. I've started researching real estate and I have so many questions, but the biggest one is: How on earth do I know the value of a property for sale? How can I possibly know if the house I’m looking at is listed at a decent price if there’s no information on what it’s actually worth? Do I need to just do research on the houses in the area? Because I don’t see that as being very helpful. Every house is different and every house has different square footage and amenities. .

Theres no information about this online. Or I'm simply too inexperienced to know where to look.

Theres no information about this online. Or I'm simply too inexperienced to know where to look.

Timothy Lewis · Answer

@Cherie Durand, absolutely look at other homes to compare the listed price. Generally, look at sales within the last 3 months. You typically want to find properties that are similar enough. Try to keep your list of comparables to a small radius depending on the area your evaluating (the more dense, the smaller the area).

John Teachout · Answer

Sure there's probably repairs that need to be done but the neighbor's house probably also needs some repairs. Find other houses that have sold as close geographically as possible to your target house and also as similar as possible. A 3 bed 2 bath home is going to have a similar value of a 3 bed 2 bath home down the street that sold 2 months ago. Maybe one has Hardie plank and one has vinyl siding and one has a newer roof and so forth. You can add/subtract a little for those type of things but even with no adjustments, it's going to get you a ballpark number. "comparables" IS the method that's used for pricing single family homes.

Chris Coleman · Answer

That's why you get an inspection before closing the deal.  You start with an appraised value based on comps, but then negotiate a final price based on inspection report if possible.

Cherie Durand · Answer

I guess I'm just considering all the hidden things that would need to be fixed or replaced that I can’t see. It wouldn’t stop someone from posting their house for sale at the same amount that their neighbor did… Even though they have alotta repairs internally. I'm in subprime lending. I'm used to car dealers lying about what's underthe hood, If that explains it. Lol.

Logan Russell · Answer

Your on the right track. Look at other properties in the area that are similar to what your after. These are what is considered a 'comp property". You will get a feel for value after time and how to evaluate and run the numbers. There is a place online to learn how to do so, it's called biggerpockets so your at the right place. Gonna take some time to dial er' in. Goodluck.

Chris Coleman · Answer

@Cherie Durand the value of single family real estate is generally based on comparables in the area.  That is, what are similar type, size, age, class, properties selling for within a 3 miles radius?  It helps if you can get a price per square foot for houses in the area.  A realtor can give you this number.  If it has nicer amenities or upgrades, then you can add for that.  If it’s has lessor or is somewhat distressed then you discount.

Loan to value? Where do I find that?

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