I'm a first time home buyer and I found a 5 year old property I'm interested in - but had some concerns:
- Comps on the appraisal were up to 30 years old.
- Some comps required up to $50,000 in adjustments.
- The average price per square foot on comps was $90.5 vs $103 on this property
- This is a very expensive home for the area. Much higher than the average closing price of the last 12 months.
- Newer construction but the floor plan is not very open.
Does all of this look reasonable or are there red lights here? I probably just have some first time buyer remorse.. but I thought it can't hurt to put my thoughts here and see what others think.
Are you saying comparables were sold thirty years ago? Or built thirty years ago, but sold recently?
What makes this one house worth more than others in the nearby area? Usually it is not wise to pay the most, even if it has superior amenities. Most people buy the area, not just one house.
They were built up to 30 years ago.
What makes this house worth more than the average is something I have been wondering about. It's not any bigger - lots are about 8,000 square feet. It has no decks or basement. No pool or real fireplace. But it is a newer home in an area where there are very few.
Many of the comps had a $25,000 view adjustment.
I like the style and having a view of more than the neighbors wall is definitely a plus and very rare in this flat area.
I don't Mind paying what they are asking but I'm most concerned about resale. If the price is justified... The appraiser seems to think so but looks like he really had to work at it?
Infy, appraisals are subjective. They represent only one person's opinion of value on a specific day. In spite of the new appraisal rules, IMHO, it still matters who commissioned the appraisal.
Incidentally, if you intend to make an offer, did your agent contact the appraiser and proffer alternative comps, i.e. similar properties sold within the area during the last 6 months? BTW, do you have alternative comps?
Do you absolutely love, love, love this property? Do you intend to hold it/live in it for the long-term? If so, then I would follow the strategy mentioned above WRT the appraisal, if possible - that is, if you truly believe the property's overvalued. OTOH, I also agree w/Meischa - in general, it's preferable to purchase the cheapest property in the best area possible.
Without any other information, if you were my client, I would never recommend that you simply pay what the seller's asking. (Hopefully, your agent can assist you and determine a reasonable, alternative value.)
You mentioned that you have "concerns". Your use of that word would concern me. After analyzing all of the available data to make the best, most informed decision possible, sometimes you need to trust your gut.
If you have concerns now, what will happen after you purchase the property and learn even more about it, i.e. find all the skeletons in the closet, so to speak? One of the things we've found over years of working with our clients is that you never go wrong using your intuition. In addition, properties are like trains, there's always another one coming along. (or whatever that old saying is, lol)
If you pass on this property, obviously I can't guarantee it but personally, I wouldn't be surprised if you posted back and had found your dream home within a month or even less. If you'd like to forward more information, I'm sure you'll receive many more good, informed opinions here on the m.b.
All that's JMHO.
Best of luck to you -
I'm not a Realtor or any type of professional, but the advice of "Go with your gut/intuition..." sounds right-on; that usually never fails a person.
First of all, infy, welcome to the Real Estate Boards! I would normally attach my usual sunglasses/smile face but the emoticons aren't working right now!
Something else isn't working as well and that is why you are seriously considering purchasing a house that requires 25K or more adjustments by the appraiser in order to make it qualify.
Beyond that - and reading between the lines - I'm pretty sure that you aren't in love with this place from the words you have written - "newer construction but the floor plan is not very open." In fact, I didn't see even ONE attribute that you, personally, found attractive.
So why are you spending time looking at it? Being nudged by an agent who is telling you that "this is a great buy and someone will snap it up right away if you don't?"
My advice would be to move on until you find that certain place that you just know is right - this one isn't that one! You will only be a first-time home owner once - make it count. Take your time and don't let anyone convince you otherwise....
I agree with Idaho, you don't sound "positive" in your description of the property, and if it's not appraising at the appropriate price - you really need to think hard about that. You have two choices - go back to seller for price reduction, or come up with cash. One of those might be right for you - but it SO depends on how you feel about the house. If your gut is not up to it, I would, as others said, pass it on by and find a house that you connect with. One that when you sit down (if there's a chair in it) and look around, you just see wonderful possibilities....... Best of luck - not sure who thinks house buying is fun, because I think it's really HARD.....
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