We have seen very interesting dynamics within the real estate markets during the past several years.
There was even a time period where investors ruled the market, forgoing their appraisals. As long as the property “penciled” out and made sense, according to their goals, they bought them, waiving the appraisal contingency.
That is hard for a “owner occupant”, run of the mill, real estate buyer to compete with for certain.
When we meet with clients in our offices we speak about values and appraisals. How money gets lent on a home purchase and the factors involved.
When the process starts and you have found a property you wish to write an offer on. We start circling the wagons and looking for “comps”. Comps are Comparable real estate listings that are exact matches, or very close, to the home you are going to be writing an offer on.
With that being said, we also look within a specific tract or radial circle. We don’t want to compare the home you are buying with homes that are a long distance away. An appraiser would not and neither will we.
We also want to see the housing configurations of the home you are buying compared to those listings that sold. If the home you are buying is a 3 bedroom, and the only comps are 4 bedrooms, adjustments will have to be made before writing the offer.
Looking at the lot sizes, numbers of bathrooms, additions (permitted), upgrades and renovations are important when comparing the subject property to the comparable sold ones.
Time periods are also very important to understand from an appraisers view point. They are not going to look back 5 years, 4, 3, 2 or even 1. They are going to limit their search to the past 6 months. If they can find enough “comparable” properties in the past 3 months, at least three, so much the better.
After all of this data is taken into account, and explained in our offices by our team, to you and yours, we then put pen to paper and write a solid offer with justification as to the amount you are offering.
Doing this homework for our buyers gets offers accepted at a faster rate than not completing our due diligence.
Hire professional Realtors and make sure they are covering your bases when it comes to buying or selling real estate.