Analyze Comps from Indonesia and Make Offers

In real estate you make money when you buy property and not when you sell. That's why it's so important to be able to determine the true value and make a bid for the right price. Depending on the loan criteria you usually want to offer somewhere around 55-65% of the current value of the property. If you used 60% as your magic number on a $ 100,000 property requiring $ 20,000 for rehab, your offer would be $ 40,000. Asking for the price plus the required work amounts to $ 40,000 + $ 20,000 = $ 60,000 which is 60% of the retail value. To sell a property in a distressed market, you must list it at least 20% below the retail price and you need to have enough spreads to make it work and cover your expenses. In a down market, you can offer as low as 30% of the current value and this is the strategy we use with all REO, Bank Owned property and Shortsales. You should also remember that proximate analyzer indonesia in a downward market just like the stock market, its value continues to decline so you need to know your exit strategy before buying.

There are three basic methods used in assessing properties:

1. Cost approach. This method is based on calculating the value of the replacement property or how much it costs to rebuild the same property minus physical damage, functional obsolescence and the economy. Once calculated, the value of the soil is added to arrive at the total property value. In some cities, such as the City of Baltimore, property owners do not need to own land and in this case the value of land is irrelevant.

2. Comparative approach. This is the most commonly used approach and uses 3-5 other similar sales of similar properties to determine the subject property value. This will be discussed in detail in this article.

3. Income approach. Mostly used in commercial real estate where the value of a building is based on income.

In residential real estate the most commonly used approach, comparable analysis, is used by the majority of financial institutions. Investors need to consider using this method and consider other factors such as economic trends, market trends, DOMs, physical conditions, price per square foot, and ultimately sales requirements.

Comparable properties must have the same size, have the same number of bedrooms and bathrooms, have the same architectural style, age, condition, and layout. They must lie in close proximity to each other and preferably in the same zip code. Comparable sales must be new and no more than 6 months. There are free websites that you can use that can be very helpful including zillow, trulia.com and eppraisal.

Market Trends & DOM

When viewing properties, see the overall trends in this area. If there are some properties listed for sale, that's usually not a good sign. If you see a lot of vacancies on the block, that's a bad sign. This means that people are moving out of the area and there are only more sellers than buyers. Simple demand and supply laws state that due to increased supply and decreasing demand in the region, prices should be lowered. You will have difficulty reselling your property and should offer a much lower price. You also need to look at the properties currently listed on the market and DOM (Days on the Market) to get an idea if the property sells fast or just sit there for that price. Same as the SOLD property, see DOM, how long it will take for them to sell this property for a set price and how long they have been sitting in the market. Not only look at "sold" properties but also see properties listed in the market.