20 Dec Finding the Real Value on Property

While dealing in the real estate industry, you should always have proper real estate education. There is increasing competition in this field and good sound real estate education will help you facilitate and understand the profitable new trends and niches.

Do Your Due Diligence

Below is some information on buying properties and how to find out their values.  When you are buying tax liens, or foreclosure properties a good place to start is the town hall. There you can research and browse through the properties tax records.  Usually the county saves sales information within the tax record as well at the county assessor’s property value estimate.  In the case of a vacant lot in a new budding sub-division where nothing has been built yet, you can compare records with other properties in towns where similar sub-divisions have been developed and what they sold for at the same stage in development. 

Gather Appropriate Information

A Property’s fair market value is determined by recent sale prices of similar properties in the same area. You can go to the assessor’s office and see if they can give you the sales information on the lots that have sold in the last year or you can check the property taxes values on houses in the area to get an idea. The sales assume a fully informed willing seller and a fully informed willing buyer. There are websites that provide sales information as well as title companies that may give this information for a small fee.

Getting Fair Market Value

Let us say you are interested in 476 Evergreen Drive and want to know the current market value. First step (using your detailed map) is to define the neighborhood this property is located in and any likely impacts or amenities.

Next, you need a source for comparable sales (comps) from the last six months. Realtors can provide Multiple Listing Service (MLS) comps for a given area, title companies can provide comps from tax records and there are a few on-line real estate education companies that can do the same. Taking your list of comps, you drive by each comp noting condition, size, appeal and location. While you drive to each one, look for any other properties that are for sale by owner and take the same information on them. Keep in mind that comps might be affected by work that has been done since the property has sold; look for signs of recent work, especially on very low sale prices.

Up-To-Date Records

Assessors are interested as well in the value of property because they determine the tax in any particular town so they need to be up to date to make sure their records are correct.  Even though typically their estimations are lower then the Fair Market Value, they may be your best bet for an conservative property value.  

The bottom line is that real estate investing is a highly profitable business if done right. Spend some time to educate yourself on the tips and techniques that the pros use. Knowing them could save you a ton of money and at the very least make your real estate investing experience a more pleasant and enjoyable one. : )