Finding the Right Price

The other day I did a cma for a friend on a house she's thinking of buying. It's a nontraditional purchase in that she's buying it from the estate of her grandmother. The purpose for the cma is simply to establish the property's current fair market value. It's the 2nd cma as apparently one was done a year ago.

Obviously, a great deal has changed over the last 12 months making a new cma essential. The original cma showed a market value of $365K.

The home, a 4 bedroom/2 bth cape in need of renovation, is in a community I don't know well. Nevertheless, I collected information about the home from my friend; did a review of the property; confirmed the essentials through the county assessors office, and pulled together comps off of MLS. I only chose comps for similar neighborhood homes that have sold within the last three months. 

What I found was the following:

1) 367 capes were for sale in the last 12mos; 43 sold at an average price of $390K

2) overall, 330 homes are for sale right now; 112 are capes

3) 3 updated capes near my friend's property are stalled at $365-395K price points

4) 1 handyman special is on the market nearby for $299K

5) avg price for 4 recently sold capes in need of substantial updating was $333K

Bottomline? My friend's house is worth substantially less than a year ago by about 30K. While prices may very well perk up given further rate drops and increased sales, but at the moment it's in my friend's interest to go to contract right-away.