All Forum Posts by: Katie Rogers

Cynthia said, "...keep comps apples to apples."  That is good advice, but  very difficult in practice.  You can see the sold price and the basic configuration of the house.  However, unless you saw all the possible comps before they were sold, it will hard to know which ones are the apples.

That reasoning is circular.  If comps were actually an accurate valuation metric, there would not have been the inflated values of the bubble.  Investors need to use a variety of other metric to ensure "the numbers will work."  Part of the analysis includes After Repair Value which may look at comps but still be quite conservative in order to avoid a situation wherein the numbers do not work.

Agents like comps a lot.  However, comps are usually nothing more than instances of confirmation bias.  Remember, the over-inflated prices of 2006 were based largely on comps.  There are lots of valuation tools that are more effective than comps for appraising a property.  If the appraisal came in low, then the asking price was too much.

Gary, Sellers do not pay the bill.  The buyer does.  The seller pays from the proceeds of the house.  It is the buyer who provides those proceeds.  You are probably right that a good buyer's agent will be worth every dollar.  So I guess the conclusion is that most buyer's agents are not very good, unless and until the buyer aligns the agents interest most fully with the buyer, usually with a bonus on top of the commission.

@David.  If only buyer's agents took their fiduciary duty seriously.  Generally speaking, they do not because their interests are more aligned with the seller and his agent than his own client.  The system as it now stands has a built-in conflict of interest.  As a buyer, I am always looking for ways to better align the agent's interest with my own.  

You can find out if the owner has paid off the mortgage by checking with the recorder's off ice.  You can see all the loans on the property.  If there is only the original mortgage, you can run a mock amortization schedule to estimate where the owner is on the mortgage.  

 I am not sure I would deny the tenant the use of the garage.  Seems like that should come with.

My gosh.  99.9% is just an expression that means "the vast majority." It is certainly no reason for disparaging remarks about religious people.  I do not know if "ethical" is the right word, but certainly a lot of real estate agents are conflicted when it come to their fiduciary duty towards especially buyers.  They even have seminars on what fiduciary means and how to be minimally compliant using a lightweight definition of the buyer's interest

Well, it is hard for renters to qualify for a loan when the median price of a house is 18 times the median wage.  With our low inventory, even those who do qualify have a difficult time finding an acceptable house.  The million dollar price tag certainly does not come with million dollar quality in my town.

"I hate to say it but my experience has been that bad credit is almost universal with renters."  How is that even possible given the number of renters relative to homeowners?  75% of residents in my town are renters.  I am pretty sure most of them do not have bad credit.  Is there possibly some reason your units attract this sort of renter?

Hello Matt,

You wrote "When the homes are in this price range your new buyers income is generally over 200k vs city data median. These are 99% owner occupied hoods, with virtually zero vacancies." The neighborhoods in Santa Barbara are not owner-occupied.  75% of the downtown residents rent.  Outside downtown, the rental rate is lower but does not go much below 50%.  It is true that there is near zero vacancy. Anybody who buys this house at the price Alex is hoping for will not likely be living in the house because anybody who makes $200K will probably have higher standards for the rehab that what she is planning to do.  The buyer will most likely be an out-of-area investor who puts the property on the rental market at a loss and hopes any gain will come through appreciation.