Updated almost 13 years ago on . Most recent reply
Potential house, need advice
A new house just came up on the market as an REO with a list price of 189K
It was listed for 259K in 2010 as non REO
Here is a link to some pictures of it currently, pictures were not taken by me
https://picasaweb.google.com/bravo568/PJS?authuser=0&authkey=Gv1sRgCNXnz5bQhYmpUQ&feat=directlink
What should be my next step in deciding if this is a good deal or not? I have tried looking for other properties similar to it that may have sold on MLS however I can't seem to find any. Any suggestions/advice/negative comments are all welcome
Most Popular Reply
Overestimating value is one of the most common mistakes real estate investors make and you are in danger of falling into that trap. How many times do you hear about people underestimating value? Very rarely, and that is because people find comps that support per-determined ideas and wants.
Additionally, new investors tend to focus on data points that are essentially worthless. For example, you note that the property was listed in 2010 for $259K as non-reo...which really doesn't tell us anything because 1) it did not sell and 2) that was 2010.
As the others have said the comps you found are not comps, so those do not help much either. As Luis suggested, you might pay an appraiser so you can view the report and see which comps they chose and how the adjustments were made. This may not help you on this particular house, but it will help you understand the valuation process a little better.