Pulling comps - Ron LeGrand style

[BenSanderson]

Hi all,

As I will be attending the Ron LeGrand workshop later this month, I am beginning to look at For Sale By Owner properties and collect the various data regarding asking price, market value, repairs, etc.

The big question mark for me is how I can determine actual market value on a house without having my Realtor pull comps for me? Every other thread I`ve looked at on these forums suggest the same thing - just get your Realtor to do it. Understand that I would most likely be structuring these purchases without any Realtor involvement, so I don`t want to waste their time pulling dozens of comps for no eventual compensation. There seems to be an abundance of online services in the US that can give you approximate housing values (Zillow.com, etc.), but I haven`t seen anything active in Canada.

Could I appeal to any of the Ron LeGrand bootcamp graduates from out west to suggest how I would go about this crucial assessment of each property I investigate?

Much thanks in advance!

 

[manojsingh]

Hi Ben, I use my realtor for this but indicate in the begining that this is future direct sale. My realtor friend know that he will get something else from me in future because he is part of my team.

 

[Thomas Beyer]

QUOTE (BenSanderson @ Oct 12 2010, 07:31 PM) ...

The big question mark for me is how I can determine actual market value on a house without having my Realtor pull comps for me?..
It is called KNOWLEDGE !

if you are unable to assess value of a home quickly then you have not done enough due dilligence or your market is too broad.

"market" being a property type and area !

Narrow down to a MUCH SMALLER market, say 3 BR townhouses between ABC Street and DEF street and XYZ avenue and FGH avenue. Therefore, if you see a lsiting you must know within a few minutes a rough esitmate. If you do not know that, then do more research .. in a narrower market until you become an expert in that very narrow market. You MUST know more than 99% of all realtors for that market as you are FOCUED and most realtors are not !

You must know if a south facing veranda commands X $s more than one facing north. You must know if a basement in that 3BR townhome is worth X $s more than one without. You must know that an upgraded TH is worth X $s more than one that is ugly. You must know that THs east of JKL street drop in value by 10K per block .. etc. !!

Hard to delegate research of an area .. not impossible .. but hard !! Do it your self ! If market is too broad: narrow it ! You cannot buy more than one or 3 houses to start with. Don`t specialize in an area that contains 350+ potential homes !!
Related post: How to get started http://myreinspace.com/public_forums/General_Discussion/61-4391-How_to_get_started_.html

 

[housingrental]

I like Thomas`s post

 

[stevethrondson]

QUOTE (BenSanderson @ Oct 12 2010, 07:31 PM) Hi all,

As I will be attending the Ron LeGrand workshop later this month, I am beginning to look at For Sale By Owner properties and collect the various data regarding asking price, market value, repairs, etc.

The big question mark for me is how I can determine actual market value on a house without having my Realtor pull comps for me? Every other thread I`ve looked at on these forums suggest the same thing - just get your Realtor to do it. Understand that I would most likely be structuring these purchases without any Realtor involvement, so I don`t want to waste their time pulling dozens of comps for no eventual compensation. There seems to be an abundance of online services in the US that can give you approximate housing values (Zillow.com, etc.), but I haven`t seen anything active in Canada.

Could I appeal to any of the Ron LeGrand bootcamp graduates from out west to suggest how I would go about this crucial assessment of each property I investigate?

Much thanks in advance!

You can quickly burn out a great relationship with your realtor by asking for help with comps when you are buying and selling without him / her... If you are local (Calgary or Edmonton), try calling Diana Turk. 403 969-3366. She`s my assistant and she`s got a little sideline business getting comps for investors. Not sure what she charges but she`s busy so it must be competitive...

Good luck.

 

[BenSanderson]

Thanks for everyone`s input!

I agree that specialized knowledge of an area and it`s housing data is a tremendous asset, however it should be understood that Ron`s system is not geographically specific. I know the "Southwest Kitchener 1300 sq. ft. 3/2 detached two-storey" segment quite well, but this is only a tiny portion of what we`re looking for. Because we are after the 1-2% of houses that fit Ron`s specific criteria, we must open our nets to include a very large area, perhaps even an entire city or multiple cities. Any house is worthy of investigation - $130,000 condo in a rough area or a $700,000 detached in a beautiful neighbourhood. Because I have to be ready to properly analyze anything that fits, this leaves me trying to piece together a rough idea of a house`s value based on MLS list data, which is admittedly not nearly as accurate as sales data.

I definitely do not want to burn out my Realtor, so I am left with three options (that I know of):

1. Pay my Realtor on a `per pull` basis.

2. Find a service like the one Steve mentioned above (although I`m in Ontario...)

3. Try to estimate using MLS list data and then adjust based on the probability of slightly inflated asking prices (assume the sale price will be $5000 - $10,000 less then current asking)

I`m sure there is an easier answer to this, but it escapes me at the moment...

 

[JimWhitelaw]

I use a combination of a friendly realtor who knows what I`m doing and browsing MLS myself. Looking at the asking prices can at least show you what the outliers are and give you an idea of the range. Sure, most listed properties are going to go for somewhat less, so discount accordingly. For a first-pass filter, simply knowing the range is close enough. Make sure your realtor knows you don`t need a full detailed CMA, just some similar comps so you can get a feel for the area. You can get more detailed about the ARV after you`ve established the seller`s motivation, terms available and you`ve seen the house. Since most of my leads come from my website, I try to do a bit of investigation myself before I call the person back so I`ve got some sense of the current prices in that location.

Also, when establishing your ARV, don`t forget to "leave something on the table" for the next buyer and for your realtor if that`s how you`re selling. You`ll get a quicker, easier sale and if you`re selling to another investor or someone you may do business with later, you`ll have an ally who may be in a position to do you a good turn later.

 

[gwasser]

QUOTE (BenSanderson @ Oct 13 2010, 12:02 PM) Thanks for everyone`s input!

I agree that specialized knowledge of an area and it`s housing data is a tremendous asset, however it should be understood that Ron`s system is not geographically specific. I know the "Southwest Kitchener 1300 sq. ft. 3/2 detached two-storey" segment quite well, but this is only a tiny portion of what we`re looking for. Because we are after the 1-2% of houses that fit Ron`s specific criteria, we must open our nets to include a very large area, perhaps even an entire city or multiple cities. Any house is worthy of investigation - $130,000 condo in a rough area or a $700,000 detached in a beautiful neighbourhood. Because I have to be ready to properly analyze anything that fits, this leaves me trying to piece together a rough idea of a house`s value based on MLS list data, which is admittedly not nearly as accurate as sales data.

I definitely do not want to burn out my Realtor, so I am left with three options (that I know of):

1. Pay my Realtor on a `per pull` basis.

2. Find a service like the one Steve mentioned above (although I`m in Ontario...)

3. Try to estimate using MLS list data and then adjust based on the probability of slightly inflated asking prices (assume the sale price will be $5000 - $10,000 less then current asking)

I`m sure there is an easier answer to this, but it escapes me at the moment...

You could do a title search. Often the sale price of the last transaction is reported on title. At $5.00 per title that maybe expensive but then, it also cost if you use a Realtor. Nothing comes for nothing and Realtors with the MLS were the only ones who invested in a decent database. Maybe if you told your realtor that you pay him $5.00 per property that he is willing to do it for you - somehow I doubt that though.

 

[cmattric]

I think the only way to understand ARV is to be an expert in a region.

By region I meant; it could be a street, a neighbourhood, a Quadrant, or a city.

All of the above is based on your experience and judgement.

In addition to that, you can use your realtor to "confirm" the price in your mind.

That way you cannot find anybody to blame if you miscalculated the ARV.

 

[BenSanderson]

QUOTE (JimWhitelaw @ Oct 13 2010, 05:18 PM) I use a combination of a friendly realtor who knows what I`m doing and browsing MLS myself. Looking at the asking prices can at least show you what the outliers are and give you an idea of the range. Sure, most listed properties are going to go for somewhat less, so discount accordingly. For a first-pass filter, simply knowing the range is close enough. Make sure your realtor knows you don`t need a full detailed CMA, just some similar comps so you can get a feel for the area. You can get more detailed about the ARV after you`ve established the seller`s motivation, terms available and you`ve seen the house. Since most of my leads come from my website, I try to do a bit of investigation myself before I call the person back so I`ve got some sense of the current prices in that location.

Also, when establishing your ARV, don`t forget to "leave something on the table" for the next buyer and for your realtor if that`s how you`re selling. You`ll get a quicker, easier sale and if you`re selling to another investor or someone you may do business with later, you`ll have an ally who may be in a position to do you a good turn later.

That`s wonderful advice, Jim - thanks! I`m also glad to read in your various posts about what has been working and not working for you, as well as some of the deals you`ve successfully put together. Very inspiring to see these strategies working in Canada!

Also, thanks Godfried and Mehmet for your thoughts and advice!

 

[GaryMcGowan]

1. Review the homes that are for sale on the mls in the area
2. Once you think there is an opportunity ask your Realtor to pull comps


To pull title in Ontario I use ontariotitlesearch.ca it cost $69 + taxes. Or I have my lawyer quickly do it, or you can go down to the title office and do it,

 

[gwasser]

QUOTE (GaryMcGowan @ Oct 13 2010, 08:38 PM) 1. Review the homes that are for sale on the mls in the area
2. Once you think there is an opportunity ask your Realtor to pull comps


To pull title in Ontario I use ontariotitlesearch.ca it cost $69 + taxes. Or I have my lawyer quickly do it, or you can go down to the title office and do it,

If you want to have a rough idea of market price you may want to consider the following trick. Take the average list price of actively listed similar properties in your target area.

In a hot market, this probably will be your market value.

In a balanced market deduct 5%; in a buyers market deduct 10%.

Hope this helps.

 

[housingrental]

Hi Gary

I didn`t look into this at all but total cost from my lawyer doing it is $69.30 - coincidence from reading these posts as I just had this done yesterday on a property I`m interested in putting an offer in on.

You`d think there would be a cheaper way to get this done online -anyone know where?

QUOTE (GaryMcGowan @ Oct 13 2010, 10:38 PM) 1. Review the homes that are for sale on the mls in the area
2. Once you think there is an opportunity ask your Realtor to pull comps


To pull title in Ontario I use ontariotitlesearch.ca it cost $69 + taxes. Or I have my lawyer quickly do it, or you can go down to the title office and do it,

 

[RedlineBrett]

The only people that have access to sale records of MLS listed properties are industry members. If you don`t want to use a realtor you can use an appraiser if you wish.

A title search won`t get you anywhere unless you know of a comparable property that has recently been sold. Even then there can be a delay before that property is registered with land titles. Pulling title offers a lot of insight into a property but it does very little to tell you about the property`s value.

 

[housingrental]

Yes Brett sorry I was somewhat on a tangent - I was doing it in this case to look at debt structure on the property not to gain past sold data on it or to use that sold info for a comp for a different property.

QUOTE (RedlineBrett @ Oct 14 2010, 12:35 PM) The only people that have access to sale records of MLS listed properties are industry members. If you don`t want to use a realtor you can use an appraiser if you wish.

A title search won`t get you anywhere unless you know of a comparable property that has recently been sold. Even then there can be a delay before that property is registered with land titles. Pulling title offers a lot of insight into a property but it does very little to tell you about the property`s value.

 

[GaryMcGowan]

QUOTE (housingrental @ Oct 14 2010, 11:51 AM) Hi Gary

I didn`t look into this at all but total cost from my lawyer doing it is $69.30 - coincidence from reading these posts as I just had this done yesterday on a property I`m interested in putting an offer in on.

You`d think there would be a cheaper way to get this done online -anyone know where?

I`ve searched high and low, This seems to be the easiest way. The turn around time is usually under 4 hours. I`m pulling title to confirm there is nothing else registered on the title that shouldn`t be there. I`m looking for any surprises that the seller has not told me about or simply they do not know about.
Note: I use this service when I`m offering to take over payments and the responsibility for the property after I know there is an opportunity.

 

[BenSanderson]

QUOTE (gwasser @ Oct 13 2010, 11:09 PM) If you want to have a rough idea of market price you may want to consider the following trick. Take the average list price of actively listed similar properties in your target area.

In a hot market, this probably will be your market value.

In a balanced market deduct 5%; in a buyers market deduct 10%.

Hope this helps.

Great formula, Godfried!

This will probably be the best I can hope for, considering I can do it all on my own whenever I need to. Also, it should be enough to give me a decent idea whether the property is priced well enough to warrant further investigation. Anything that looks good enough to put an offer on would then have me talking to my Realtor for their opinion or perhaps doing a title check as mentioned above.

Some very useful ideas here, folks - thanks!

 

[gwasser]

QUOTE (GaryMcGowan @ Oct 14 2010, 11:59 AM) I`ve searched high and low, This seems to be the easiest way. The turn around time is usually under 4 hours. I`m pulling title to confirm there is nothing else registered on the title that shouldn`t be there. I`m looking for any surprises that the seller has not told me about or simply they do not know about.
Note: I use this service when I`m offering to take over payments and the responsibility for the property after I know there is an opportunity.

Hi Gary,

Just curious. Do you pay $69 per title?

In Alberta, we have a government website where you can sign in as `guest` to search for the title (and pay by credit card). Once you find it, you can pull it for $5 this includes an e-mail to you with the title on PDF attached. Also, you can find here condo plans and documents registered on title with the condo corp (strata corp). It also includes the land surveys (if available) of some raw land as well as entire condo complexes. All available in electronic format for a few bucks.

When you buy a property through a realtor, this is one of his/her services for properties you want to do an offer on. This way the Realtor checks whether there are any problems with the sale including issues arising from the Dower Act. Quite often both Seller and Buyer`s Realtors do this routinely.

Something like that may also exist in Ontario or elsewhere in Canada.

 

[MonteDobson]

QUOTE (gwasser @ Oct 14 2010, 09:29 PM) In Alberta, we have a government website where you can sign in as `guest` to search for the title (and pay by credit card). Once you find it, you can pull it for $5 this includes an e-mail to you with the title on PDF attached. Also, you can find here condo plans and documents registered on title with the condo corp (strata corp).
Likewise in SK, it costs $10 to pull title from the ISC website.

 

[GaryMcGowan]

QUOTE (gwasser @ Oct 14 2010, 11:29 PM) Hi Gary,

Just curious. Do you pay $69 per title?

In Alberta, we have a government website where you can sign in as `guest` to search for the title (and pay by credit card). Once you find it, you can pull it for $5 this includes an e-mail to you with the title on PDF attached. Also, you can find here condo plans and documents registered on title with the condo corp (strata corp). It also includes the land surveys (if available) of some raw land as well as entire condo complexes. All available in electronic format for a few bucks.

When you buy a property through a realtor, this is one of his/her services for properties you want to do an offer on. This way the Realtor checks whether there are any problems with the sale including issues arising from the Dower Act. Quite often both Seller and Buyer`s Realtors do this routinely.

Something like that may also exist in Ontario or elsewhere in Canada.

Yes, I pay 69+ for title search, (hence I do not pull it unless I really, really want it)
I`m not specifically sure what an Ontario Realtor can pull from within the MLS database or other. I know they can view who sold and bought.
As for a government website - nonexistent.