By following a few simple steps you can determine the home values of properties and use them as a starting point. This starting value is not a home appraisal and does not replace hiring a professional home appraiser.
Being able to determine the value of a property makes you a very valuable birddog. Most investors would be grateful for having access to owners that are interested in selling their home. A motivated seller together with the value of a property makes you worth your weight in gold. Most birddogs who make it this far usually continue learning about real estate investing and eventually have their own birddogs out in the field.
Before visiting homes or determining the value of homes, you will first need to talk to the owner to determine if you will be going any further with this particular property. Your decision to visit the property or to start determining the value of a home is based on the owners motivational level and their answers to several questions about their property. If the responses from the owner indicates they are not interested in selling their property, then thank them for their time and give them your contact informationjust in case they change their level of interest in selling their property. At this point, there is no need to spend any more time with a non-motivated seller because there are a lot of other owners you can talk to that are more motivated to sell. As a matter of fact, you should only spend your time with motivated owners.
When an owner is talking to you about their property, make sure you are listening because they will undoubtedly answer many of your questions without you having to directly ask them. Of course, any unanswered questions can easily be answered by asking the owner. You also want to find out how motivated the owner is in selling their property. If they would rather let their property continue to deteriorate in value instead of selling it,then find another owner to talk to. Otherwise, set up an appointment to go visit the house.
While visiting the property you are only looking for obvious repairs, that can be spotted by an untrained person, because you will have a home appraisal by a professional home appraiser after you and the owner come to an agreement and have a signed ontract.If anything major unexpectedly shows up in the home appraisal that would greatly affect the value of the house, you can make the necessary adjustments to your contract. Remember, your goal for visiting the property is to meet the owner face to face,to determine the value of the house by seeing the condition of the house, and to determine how motivated the owner is in selling their property.
Remember people do business with people they like and trust. No matter what offer you present to the owner, if they don't like or trust you the deal is off. The condition of the property will provide valuable information for determining the value of the property. The owner's level of motivation will also be a critical factor in your success.
After visiting the property you need to conduct your property analysis using the information you obtain from the property to determine the value of the house or some times referred to as after value repair (ARV). There are several free resources on the Internet that will provide you with an estimated home value. www.homesandland.com//HomeValuations.cfm provides several home value results from zillow.com, eppraisal.com, homegains.com, and trulia.com . Each of the home value results are linked to the individual corresponding websites.
Now take a percentage of the after value repair. The after value repair amount can be the average market value of the houses sold in the neighborhood, or you can use the average home value amount from the Internet. Remember these are just estimates, so if you want more accurate results contact a realtor. The percentage used varies from each investor, however most investors use between 60 - 75 percent. Some investors may use a higher or lower percentage, but this is a general ball park figure.
The calculated percentage of the home value or after value repair, needs to be subtracted by the estimated cost of repairs to determine our highest contract offer. Let the owner know you are still very interested in buying their property and you will be sending them an offer. Make sure they understand you will be paying cash.
Now that you have a signed contract what's next? Return to this website for the next step and subscribe to our newsletter for more information about questions for owners, and repairs to look for. If you are interested in the next step, creating a buyers list, click here.
Beginner Investing Tool Information
Finding Fxer Upper Houses
Locating Hard to Find Homeowners
Identifying Motivated Sellers
Calculating Home values
Finding Buyers to Buy Properties
Flipping Real Estate
Return from home values to Home