Confidence Wins Bidding Wars [Analyze This]
by Osman Parvez
The other day I took buyers to see an unlisted property (found on Zillow). One of the ways I help clients get a sense of market value is by seeing available property and helping them track sold prices.
Developing a sense of market value will help my clients feel confident when we need to submit a strong offer quickly. Any delay because we’re not sure about valuation could give room for a competitive offer to win out. Remember, the current market is inventory deprived and bidding wars are common. See Boulder is Desperate for Inventory and Boulder Condos Also in Short Supply.
These particular buyers were early in the process. They hadn’t seen much property to date, so I did some legwork on the listing before we saw it. My buyers decided to pass, so I can now share the back of the envelope analysis with you on the blog.
The property analysis below is for 1031 Portland Place #4. A couple of thoughts:
1. If my buyers had wanted to put in an offer, the next step would have been to analyze the unit’s location within the complex and to review the listing details from the sold comps. Interior photos are particularly useful, allowing an adjustment for upgrades such a remodeled kitchens and baths.
2. The last market sale in the development occurred nearly three years ago. Odds are, you’re looking at a low appraisal. Read my post on how to negotiate a low appraisal.
3. The owner paid $290,000 in 2004 and is asking $359,999 ten years later. This represents a 2.3% IRR, excluding any additional capital improvement or repairs put into the place. Not a great ROI and certainly not egregiously offensive to a buyer. At the asking price, the property basically appreciated at the rate of inflation. The place has some deferred maintenance, but given the stellar location of 1031 Portland, the asking price appears conservative.
Due diligence tip: Check for flood damage and repair quality.
Here’s a link to download the analysis.
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Osman was a refreshingly honest realtor. He stressed through the entire process that his goal was to make me happy with my home purchase. I greatly appreciated the fact that he never shied away from pointing out the negatives as well as the pluses of different places while leaving the final decision up to me.
We can highly recommend Sophie. Her attention to detail and communication skills are great. Our home was in area that most realtors are not familiar with, but Sophie took extra time to get to know the neighborhood in order to give us quality service. She also brought in a professional photographer to make our home look its best. Even though the listing was in winter, the house sold quickly. With Sophie’s business and people skills, we have no doubt she will be a top realtor in the area.
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More about the author
Osman Parvez
Owner & Broker at House Einstein as well as primary author of the House Einstein blog with over 1,200 published articles about Boulder real estate. His work has appeared in the Wall Street Journal and Daily Camera.
Osman is the primary author of the House Einstein blog with over 1,200 published articles about Boulder real estate. His work has also appeared in many other blogs about Boulder as well as mainstream newspapers, including the Wall Street Journal and Daily Camera. Learn more about Osman.
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