Posted by Doug (ON) on August 18, 2001 at 15:53:23:
if you really want to be helpful, how about telling us how to arrive an accurate price without using realtor comps? (Assuming they are accurate.)
As I stated several pages ago. I’ve taken the average of the assessed value of all the same-style homes around the home in question, and then taken the average between the assessment and the asking price. So far this seems to offer a fairly accurate FMV, at least in my immediate neighborhood which I’m obviously familiar with.
Of course this is more of an art than a science. I don’t know what exactly is in all those similar homes, all I know is that they are most likely the same layout. I think the averaging of their assessments should clear out any major discrepences.
This also obviously assumes that the seller is over pricing their home. Let’s take a home just a few up the street from me. Private sale, 3/1 raised bungalow, recent updates. Asking $168k.
Now let’s say this seller called a few realtors who promised they could sell the place for anywhere between $170-$180k, in order to get the listing. The seller takes the middle ground of $175k and figures that since they’re saving the commission they’ll ask $168k and even make a few more bucks.
I take the assessed value ($138k) and compare it to similar homes up and down the street, the average comes out to $140k. Half way between $140k and $168k is $154k. Before I began this hayride I figured the place was worth $155k.
Not bad, but if you care to share your wisdom on comps, I’d like to read it.
Be Careful Using HomeGain Comps! - Posted by Dave Holls
Posted by Dave Holls on August 18, 2001 at 15:17:02:
I have used HomeGain to see what they offer and I wanted to let eveyone know how it arrives at its comps.
I plugged in the address of my home. Then the site pulled up the last public sale record for my property. It shows my property and its last assessed value. It also shows you an estimated value range. This is Important. It based that range from the last sale price to what the current assessed value of the property is. That is all. As we all should know, the assessed value of a property means nothing towards its true value. The value range I was given on my property was about $50,000 to low. You are also given the option of puting in more desription of your subject property. When I put in mine the value range actually dropped - even though I have a larger home than most in the area. This is because when you put in the descriptive information it then changes its value range based on the comps it has available in your area that HAVE this descriptive information available on them. (Many of the comps don’t have any description, so this new value range is only based on the ones that do. This is completely unreliable, as the value range now is only based on the comps it has available with descriptions.
Anway, here is the problem that occurs. The site finds its comps solely based on this value range that it has come up with and within a certain mile radius. You cannot tell the site how to find the comps, or what criteria to base the search on. So when I pulled up the comps, they were all within the value range, but they were not comps of my property. Yes, these comps were within a certain mile radius. But most of them weren’t in my city, let alone my neighborhood. And many of these sales were 2 years old. Most didn’t have any descriptions of the property, and the ones that did only had ranges - nothing exact. (I.e., 1000-1500 sq.ft, built 1950-1955)
These are not comps of a property. These are completely unreliable. How can you use them, when you’re at the mercy of the site to pull up the comps based on its own criteria - especially when the criteria is incorrect. I know there are other sites that have some comp information available and I have not had a chance to use all of them. But I would suggest that you not use HomeGain for your comp info, it is much to unreliable. And even if it was possible to finally get properties in your immediate area, the numbers would still be useless because you don’t know how these homes compare to your subject property (architecture, sq.ft, bedrooms, bathrooms, lot size, basement, garage, CONDITION, etc.)