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Please offer advice I'm a potential buyer. The neighborhood in which I found a home I like is historic, and very eclectic, in that the homes are in varying condition, size, etc.
The home I'm interested in is a 2/1 listed at 250,000. It's very attractive on the outside, but is a complete wreck inside (needing foundation, complete electrical, plumbing, cosmetic, kitchen, etc.) Given that I want to make an offer, I asked my buyer's representative to run comps. He came back and said that there aren't any comps. Though my own research (with the help of a friend's friend who is an agent) I obtained MLS data and many photos of six other homes that have sold on that street or on adjoining blocks in the last six months. A couple of the other homes sold on the same street were 3/2 and renovated, and sold for 200,000. I told my realtor this, and he said "Oh, the homes are so different that you can't really compare them." He also said that the sellers priced the home that I'm interested in from appraisal district data (obtained by a quick drive-by and seeing the unique architecture and stunning curb appeal, with no idea of its interior being a complete wreck).
In defense of my financial interest, I then said, "So it doesn't matter that a 3/2 down the street that's renovated sold for 50,000 less?" to which my realtor brushed me off with an, "Oh, I don't know..."
My realtor lives in the neighborhood and is an investor there. I thought that comps were very important for pricing a home, but the realtor is brushing them off. Is he correct, ignorant, or devious? Is using the home's tax appraisal value more valid than using comps?
You are right, comps are equally important to have comps sold/listed of same or round about same value within last 6 months. you need to check the square footage, distance, overall condition of the house.
It is not necessary to go by the tax assessed value completely, though depends on when the last evaluation was done
$250000 might sound little too much especially when the interiors are in bad shape.
These days, we're looking at solds within the last 90 days if at all possible, due to market conditions.
The tax assessment here usually has little to nothing to do with the actual market value of the home, both because Texas is a nondisclosure state and because the tax assessment is, of necessity, dated (based on last year's data). They can be useful to find out, in general, how much above or below tax appraisal homes in an area are selling for, but not much more than that.
You'll want to find the closest sold comps you can (listed prices are just that, asking prices, and closest meaning not just in distance, but in comparison to the house in question), and then make adjustments for the differences, if there's no true comps. You'll also need information on such things as, were any credits given for repairs, did the seller pay any of the buyer's closing costs, that kind of thing, to come to a true comp.
Please offer advice I'm a potential buyer. The neighborhood in which I found a home I like is historic, and very eclectic, in that the homes are in varying condition, size, etc.
The home I'm interested in is a 2/1 listed at 250,000. It's very attractive on the outside, but is a complete wreck inside (needing foundation, complete electrical, plumbing, cosmetic, kitchen, etc.) Given that I want to make an offer, I asked my buyer's representative to run comps. He came back and said that there aren't any comps. Though my own research (with the help of a friend's friend who is an agent) I obtained MLS data and many photos of six other homes that have sold on that street or on adjoining blocks in the last six months. A couple of the other homes sold on the same street were 3/2 and renovated, and sold for 200,000. I told my realtor this, and he said "Oh, the homes are so different that you can't really compare them." He also said that the sellers priced the home that I'm interested in from appraisal district data (obtained by a quick drive-by and seeing the unique architecture and stunning curb appeal, with no idea of its interior being a complete wreck).
In defense of my financial interest, I then said, "So it doesn't matter that a 3/2 down the street that's renovated sold for 50,000 less?" to which my realtor brushed me off with an, "Oh, I don't know..."
My realtor lives in the neighborhood and is an investor there. I thought that comps were very important for pricing a home, but the realtor is brushing them off. Is he correct, ignorant, or devious? Is using the home's tax appraisal value more valid than using comps?
Thanks!
Kay
Ditto with what THL said and JMO I think your agent more ignorant or lazy than anything. Tax appraisal worthless for reasons already mentioned and you've already found several comps, though the house you're talking about is 'unique' so that factors in. What your agent should be doing is what THL brought up and that is determining whether there any credits being offered due to the inside being a wreck, seller paying anything towards buyer closing costs, etc.
If you're really interested in the home, then tell your BA to call the LA and 'determine' what credits are being offered due to the extensive interior work OR draft an offer based upon all of the work you'll have to put in to make it habitable (could be made contingent upon said credits, etc. being made by seller). Electrical, foundation and plumbing work is NOT cheap! Cosmetic is one thing, but it appears there are a lot of expensive items you'll have to do just to be able to live in the house. Back to comps and what THL brought up, you want recent sold comps - not 6 months back, and 'listing price' means squat. A good agent can look at what's recently sold and 'evaluate' the differences in the homes to give you guidance on what is an appropriate offer amount. Good luck!
Thank you all for the sage advice. It really helps a lot! I think that my agent's behavior is based on a combination of laziness and ignorance. Thanks again!
Buyer's agent? I think not. You are not getting proper representation from this jimoak.....find a good buyer's agent.
Totally agree - For example, I'll use my post where I referred to the agent in question as a BA. I did so because I wasn't sure if a BA contract had been executed which would entail OP to jump through some hoops to terminate the contract for lack of performance, etc. at this stage of the game.
OP if no BA contract, then get do as LynnKK said and find someone who will properly represent you. If you did sign a BA contract, then talk to the managing broker about the things you mentioned in your post and that you need/want competent representation which this agent obviously is not providing.
Thanks. I have not signed anything with this agent.
EXCELLENT!!!!! Then find one who actually knows what the they're doing and give you the levels of service you deserve! There's a lot of good ones out there, but just like any other profession there are also a lot that really suck - one good thing about the market is that a lot of those lazy/ignorant agents will be weeded out. Do keep us updated on how things turn out for you!
Buyer's agent? I think not. You are not getting proper representation from this jimoak.....find a good buyer's agent.
As I was reading the OP's post several things popped into my head:
Any agent that says there are NO comps is NOT doing their job. There are ALWAYS some sales that are comparable, the details of HOW FRESH the comps are, how much ADJUSTMENT must be made for age/size/condition, and finally additional factors / circumstances.
How the HECK would the agent state "sellers set price based on appraisal district data"??? I mean, yeah, I can understand the mindset of factoring that sort of information into the ultimate asking price, but as the SOLE basis? Not a chance.
As to the fact that the agent you initially worked with being a BOTH a resident and investor in the area of the listing I would NOT assume that makes them an expert in the area NOR that they are attempting to use you to pump-up sales unjustifiably. The fact is that just as there are "regular people" whose minds are not adequately wrapped-around the fact that housing prices have been under extreme downward pressure for about a year, there are agents with the same affliction.
It is my advice to AVOID agents like this and also to AVOID making offers on properties such that the sellers are fixated on a unrealistic price.
Further, in my professional opinion, it is NEVER a good idea to START with a home that has a laundry list of SERIOUS problems. I do recommend to folks that are handy / capable of dealing with repairs to find places that need updating / minor kitchen-bath freshening but ISSUES with a foundation AND plumbing AND electrical scream EXPERIENCED PROS ONLY. If you were and experienced pro you would probably already have contacts that are shrewd real estate agents that could help you move a deal along. Clear?
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I'm a potential buyer. The neighborhood in which I found a home I like is historic, and very eclectic, in that the homes are in varying condition, size, etc. 
they're doing and give you the levels of service you deserve! There's a lot of good ones out there, but just like any other profession there are also a lot that really suck - one good thing about the market is that a lot of those lazy/ignorant agents will be weeded out. Do keep us updated on how things turn out for you!
Beat me to it!
