How To Determine a Property’s Value In 5 Minutes or LessAug 24, 2020
Pick your poison…
Zillow, Redfin, Trulia, you name it.
They all spit out on-the-spot property values.
But what happens when a property isn’t listed yet — or at all? How about when the almighty algorithm gets it wrong? Do the numbers account for wear and tear, hidden damage, and secret seller motivation?
Short answer: No.
And let’s not forget: Every great deal starts with a deeply discounted property.
The apps and the MLS aren’t looking under the hood to alert you that a property is overpriced (or begging to be had at a discount). Nor are they interviewing the owner and scouring every nook and cranny of the home for distress signals.
Relying on computer-generated property values will never get you a discount. No discount, no deal.
But calculating a property’s value on your own is actually a piece of cake.
Here’s how it works so you can lay the groundwork for wins in the world of real estate.
The 4-Step Formula To Determine Property Value In 5 Minutes Or Less
Here’s how you hit the “sweet spot” so you have a feel for the property’s value, and know exactly where to start negotiations so you can get in (or get out) without wasting anyone’s time:
Step 1. Review transactions over the last 90-180 days within a quarter-mile of the property.
Step 2. Calculate the average of the 3 cheapest deals.
Step 3. Multiply the average by .8.
Step 4. Start negotiations there.
Why Property Value Matters More Than You Realize
The only way to make money in real estate is to get properties at a discount. And you can’t get properties for cheap if you don’t know what they’re actually worth.
Start too high and you’re stomping on your own profits.
Start too low and you’ll price yourself out.
The simple equation above allows you to target any home — listed or not — and make a logical offer to kickstart negotiations.
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