A reader asked me to evaluate this property. It was built in 1965 has 4 bedrooms and 2 baths. 1,264 finished sq ft on the main floor and 1,000 sq ft finished in the basement. From the photos it appears to be very dated on the inside.
The seller bought this property for $133K on 3/17/1998. I believe where they are getting their comps are from 2311 Greenbrier which sold for $308K on 7/29/2008 and $310K on 9/6/2007. The problem is that all of those sales were pre-CRASH pricing.
Lets review what the sellers are looking to take away from the property. Lets assume they bought the property for 10% down at 7% on a 30 year. They would currently owe about $100K on their loan and would have paid interest payments of $86K. Their total investment in the property has been $86K (interest payments) + $13K (down payment) + $19K (principal payments) which equals $118K.
Assuming they sell at full list price of $339K gross proceeds after selling the property (6% realtor fees plus 1 % closing costs) is $315.27K. After paying off the bank loan the owner has $215.27K. On an investment of $118K that is a return of 182%!
The city has the house appraised at $265.3K ($72.5K for the land and $192.8K for the improvements). However I think this is a case of lazy land assessing because all lots on this street regardless of size only range from $72.5K for .378 of an acre to $77,800 for .895 of acre.
My rough guess is that the land is overassessed. Even out in horse country land is being assessed at $70K an acre. So to be generous for .378 an acre I would put the land at $26.5K. The house value is completely depreciated and is probably only worth $50/sq ft. At 2,264 sq ft I would put the house value at $135.8K.
I think a fair price would be $162.3K ($135.8K for the house, and $26.5K for the land). What do you think?
Let me know your thoughts about the $162.3K price. Below the post you will see three boxes that say: Worth More, Priced Right, Worth Less. Give me feedback if you think the house is Worth More, Priced Right, or Worth Less than $162.3K.
Feel free to add a comment about the property as well.