Question:
Where do you get the repair costs for the comparables?
-Student
Answer:
We just estimate that from the information we get from the MLS. If you can estimate repair for your own property, you can simply do it by looking and it’s not going to be the exact thing, but what you were looking at was an exercise we put together [in the course manual] pretty much fictitiously. As far as the numbers are concerned, we just created those numbers for the exercise.
But if you ever want to estimate what repair costs are like if you’re looking at comparables and something in your area sold low, you must get the MLS information and you must get to that listing agent and get as much information out of them as you can. But you can usually tell when you go to a house, if you look at pictures in the MLS, you can interview that listing agent and then you can drive by and see what it looks like after. And this is one of the reasons I tell everybody to stay on top of your market as best you can because as you’re working in an area you’re developing information.
We’ve been holding information in our area that goes back all the way to 1993. We’ve been warehousing statistics on spreadsheets. So, we want to know anything about our area and we want to graph it. I mean, come on, it’s not difficult!
We’ve been in markets; we’ve seen them change from one thing to another. This is why it doesn’t matter if you’re starting out. Don’t compare your stuff to mine because that’s nonsense. You may learn ten times faster than I do. Okay, you may be college educated. I’m a high school drop out, but you have to start at some point creating data, putting together information for your area. You’re not going to get past the first step if you don’t take it. So, if you’re out there and you’re looking at houses everyday and you’re following my instructions and taking my direction, you’re out there looking at houses ALL THE TIME until you get to see houses you won’t end up buying. By this time, you know what the condition is so that the guy who does end up buying it, you know what he must do to that house to make it market ready. Then when he’s all done fixing it up, you go back and see what he did, see what he sold it for, and from there you can extract whether any of the repairs he made made sense. You can find out what he paid for central air conditioning, for new windows, carpet, and paint, but that won’t vary too much from what you end up paying for it things like that.