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Hello Rob … thank you so much for the input , me being a newbee realy appreciate this typ of info
I would count that square footage in living area for starters. Then, that area would be cost out based on added to the price based on cost to construct then depreciated to give a more accurate estimate of the extra 250 sq. ft. As a broker and investor, I think the ARV you used, while valid, doesn’t accurately show how a professional would both price and list that particular property.
Hey Leon, I agree with your “more accurate” analysis. That’s why I mentioned that “appraisers” do use a PSF analysis and can use it accurately, because they make the adjustments (as you mentioned) before determining a price per square foot. The point of the video was not to show how a professional would determine value, rather, the point I was making was showing a HUGE mistake I see a lot of real estate investors make that costs them either “money” or “deals”. You’ll notice that I didn’t actually say whether the $158k or the $193k ARV was right, because I didn’t actually show/compare the 5 SOLD comps I referenced in the video. In order to “know” if either are right, you would need to review the comps and compare the list of items I recommended. I want people to look at the details that create value (like you’re suggesting), but also not get so lost in the “technical” approach that they get stumped before they even start. Then, people can make evaluations of value based on apples to apples comparisons and eventually (if they choose, although in over 10+ years I still don’t, they could do it the professional way you suggest). “Average” calculations based on a price per square foot are just inaccurate when done the way “most” people do them. You pointed out the “detailed professional” way I alluded to but didn’t expand on in the video. And, I simply pointed out a simple way to get folks to understand how to compare SOLDS with a SUBJECT property. My method has worked, allowing me to flip hundreds of houses. Thanks for the comment, I know people will get a lot of value out what you added.
Good video clip, ans short. Long ones = risky: people have a short patience today, they start, watch for a while then run off…
Conclusion: DO NOT make long VIDEO Clips no matter how good they are!
I JUST WANTED TO LET YOU KNOW THAT I REALLY ENJOYED THIS VIDEO OF YOURS,IT OPENNED MY EYES OF OTHER WAYS TO INCREASE THE VALUE OF PROPERTIES.BY THE WAY,WHATS THE LEAST EXPENSIVE WAY TO DO A JOB LET THAT ? SO YOU CALL IT ‘IN CLOSED’.
Great stuff…thanks Rob,
Listing agents also add finished garages as living space, which is fine. But a finished garage often changes the functional layout of the house. And quality of a finished garage is often lower. So while it does add to finished living area it may actually detract from overall value.
IF you see significant differences between the listed SQFT, county records or similar houses in the area, take a closer look.
Good add Pat, Thanks.
p.s. If people missed the “Deal Analysis By The Numbers” training, you can get the 20 minute video training here: http://www.CoachingWithRob.com/deal-analysis
Your explanations are clear and pragmatic and easy to follow.
Thank you !
I have a question: when I make an offer to purchase a property in Pennsylvania I use the forms supplied by the local realtors.
When I make an offer in other States, should I use the same forms ?
Thanks and regards,
Every state has it’s own real estate contract approved by it’s state board.
I have been a residential real estate appraiser for over 25 years and your analysis is correct. HUD, FHA and VA only allows us to to consider what the county has as changes done with permits. Realtors are suppose to advertise only area that has been added properly with permits also. The only two suggestions to your analysis is for neighborhood sales only go back six months and look at the sales your using as comps to decide if they are REO’s, short sales or true arms length….
Good info Thomas, Thanks.
Also, I’ll add, in addition to reviewing comps as “arms length”, people also need to consider the condition of the SOLD. There are 3 general “categories” that I group condition into, and each comes with a potentially wide range. They are: (1) distressed (2) livable but dated (3) remodeled and updated.
The greatest “range” of sold prices of Apples to Apples houses is usually in the Distressed category as listed above.
it realy helps wen you give these little videos,thank you
This was very informative information. My sister and I have really never gone by the sq ft amount for the reason you are saying. Just have to look at the pictures of the houses you have taken of the property you are selling and work the comps individually on each comp house.
Thanks, again for these videos!
The Twins Homes
When I worked for buyowner.com I did over 1000 transactions withing three years. I eventually got really good at predicting the price the home would eventually sell for. Not once did I use PSF. I would print as many photos as I could of the comps and the property history (real important) of the comps and then had a brainstorming session with the seller. It’s amazing what owners know about their particular neighborhood. Of course as a buyer you won’t be able to get a seller to open up like I did, but it can really help talking to the seller about other sellers in neighborhood. I’ve found if you can strike up a good rapport with the seller they are more likely to want you to be the one to get their house too.
BTW, the “charm” of a home can do a lot for the saleability. I notice house #1 had a fireplace. Unless it’s taken for granted in your area I would think that would add to the value. I would also temper charm with what an appraiser is going to see. You need to see things through their eyes too these days.
Your practical common sense view has made your input valuable to me. I’m now starting to look at properties in a new light and from your perspective. Thanks Rob
Didn’t quite see an easier way to determine the ARV! What is a Good formula to figure it out? Thanks.
Good stuff Rob.
I’m a newbie thats soaking it up like a sponge.
Thanks for the help.I like the straight and to the point lesson.
i like it.
thank you Rob very good videos and very good explinetions
Thanks for this valuation discussion. The issues of comparable value and repair estimation are the biggest hurdles I face in coming up with an offer, and I’ll bet it’s the same for everyone else out there. I look forward to more of these discussions!
using it all of the time, hope apple doesn’t think like that and removes this useful feature (like it has been doing with other stuff on lion)
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for a seem and also you can read about it for youreslf.
Picture you are touring as part of your auto therefore you experience a large velocity breaker in the middle of the route that you just really need to cross. You feel not comfortable mainly because you will be knowledgeable your auto provides a lousy Suspension Parts . Even so, for those who had powerful suspension components mounted, there was no will need to fret about bumps or other very similar hurdles. Suspension sections may help you to cross hurdles about the highway efficiently.
Let’s verify out the different elements of a suspension system.
Regulate Arm: This can be often known as wishbone. The form of this suspension portion is sort of triangular. It resembles ‘A’, so in some cases additionally it is called the A-arm. On a person facet, it’s hooked up to a steering knuckle with a ball joint, and on the other facet it is hooked up to an arm shaft with bushing.
Bushing: A small but important aspect within the suspension technique. Bushing is generally built of synthetic rubber to independent out its two steel sections. This synthetic rubber allows both metallic sections to coordinate effortlessly. Furthermore, it can help the suspension parts to move freely when navigating a big bump, as an example. You’ll find polyurethane bushes also out there during the market which might be much more resilient.
Ball Joint: A ball joint is actually a spherical bearing. Normally, it truly is accustomed to join the steering knuckles and the handle arms. It really is a vital part between the steering and suspension, and it really is accountable for protected operation. The difference among these as well as the conventional ball joints is that lubricants are usually not wanted for sealed ball joints as they are presently lubed, whilst common ball joints need to have normal lubing else they may result in reduce handle.
Sway Bar: Sway bars are regarded as stabilizer bars. A sway bar is used in a motor vehicle suspension program to lower jerks induced by irregular street surfaces. It also allows the motor vehicle to help keep a ‘grip’ within the street to ensure that the motive force can steer the motor vehicle properly, even even though turning or in the circumstance of inadequate street surfaces.
Idler Arms & Pitman Arms: Idler and pitman arms depend to the support of steering linkage. An idler arm is fitted to the opposite of pitman arm around the center link. It aids to hold the center link at a proper height by attaching one other end onto the motor vehicle frame. The Pitman arm can help to steer the wheel for the reason that a person of its ends is hooked up to the vehicle’s steering gear.
The ones discussed here are only some in the auto suspension components. You’ll find many extra big and tiny sections within the suspension system. Adjusting sleeves, center links, drag links, strut mounts, sway bar links, tie rod ends, wheel hubs, and other related pieces are components of auto suspension. Without understanding these parts, you cannot fully understand your auto suspension method.
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Envision that you simply are touring within your automobile and you simply face a significant pace breaker from the center of the route that you just really need to cross. You are feeling uncomfortable since you happen to be aware your vehicle contains a bad Suspension Parts . Having said that, in the event you had successful suspension pieces put in, there was no will need to fret about bumps or other equivalent hurdles. Suspension components may help you to cross hurdles within the highway easily.
Let us verify out the various aspects of a suspension technique.
Handle Arm: This can be also known as wishbone. The shape of the suspension portion is sort of triangular. It resembles ‘A’, so occasionally additionally it is referred to as the A-arm. On 1 facet, it’s hooked up to some steering knuckle with a ball joint, and for the other aspect it’s hooked up to an arm shaft with bushing.
Bushing: A small but essential element while in the suspension system. Bushing is usually manufactured of artificial rubber to independent out its two steel pieces. This artificial rubber allows equally steel areas to coordinate smoothly. You’ll find it can help the suspension parts to maneuver freely when navigating a sizable bump, one example is. You’ll find polyurethane bushes also accessible inside the market that happen to be more resilient.
Ball Joint: A ball joint is a spherical bearing. Frequently, it can be accustomed to be a part of the steering knuckles plus the handle arms. It is an important element in between the steering and suspension, and it is responsible for harmless operation. The real difference between these along with the conventional ball joints is always that lubricants are usually not necessary for sealed ball joints since they are previously lubed, when typical ball joints need regular lubing else they might trigger eliminate handle.
Sway Bar: Sway bars are also recognized as stabilizer bars. A sway bar is utilized in a motor vehicle suspension process to cut back jerks induced by irregular road surfaces. What’s more, it can help the auto to maintain a ‘grip’ about the street to ensure the motive force can steer the automobile properly, even when turning or in the case of very poor road surfaces.
Idler Arms & Pitman Arms: Idler and pitman arms depend about the support of steering linkage. An idler arm is fitted to the opposite of pitman arm to the center link. It can help to hold the center link at a proper height by attaching another end onto the automobile frame. The Pitman arm allows to steer the wheel due to the fact one particular of its ends is connected to the vehicle’s steering gear.
The ones discussed here are only some on the auto suspension parts. You will find many a lot more big and modest parts within the suspension technique. Adjusting sleeves, center links, drag links, strut mounts, sway bar links, tie rod ends, wheel hubs, and other similar components are components of auto suspension. Without understanding these parts, you cannot fully understand your automobile suspension program.
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Wow, Rob! This totally makes sense. Something that I never thought of before. Thx
lol There you go again with the “Quick and dirty” statements.
Thank You Rob for your help.
I wondered how spaces that are not considered “living” space is evaluated. Very intersteing. Thank you.