I'm looking to make some offers on homes in the Kenosha area pretty soon. One thing I was wondering is how do you all determine the true value of a home when home prices have appreciated drastically this past year? For example, I see some homes that originally sold for $40k, now asking $140k...
Ultimately, I know what to look for when it comes to making sure the property cash flows. I'm just not sure how to determine the true price of a home when the numbers have shifted so much.
What are your thoughts on this?
P.S. if you're in the WI / IL area, feel free to reach out to me and chat, always looking to build my network :)
If you are working with a local agent you can take a look at homes recently sold in the past 30-90 days. The spring and summer surge should have posted what the sales price wound up being as compared to list price. From there you can see what the active listings should sell at or around.
From there if the numbers make sense for you then you can try to put an offer in.
For me - I evaluate what a property is worth solely off the financials. If the property hits your cashflow goals at a certain price, then that is what it's worth. Of course there are many metrics to look at when analyzing deals but I rarely ever look at comps to determine a properties value.
@Brock Mogensen I agree. I feel like unless I get the property at the right price, there’s no reason to go any higher. Although that means some properties I’d be asking like $100k less than what they are listed for. But I guess it can’t hurt to make the offer anyways, right?
Never hurts to make the offer. Worst they can say is no.
Agent is the best option for sure but another great tool is using redfin for sold comps. Allows you to adjust sold dates very easily to try and spot the trends you are seeing for valuing properties.