Online House Hunting

How do you think I did on my house deal ?

I'm just looking for a few opinions on how I did on my house deal. I live in Milwaukee WI. My wife and I owned a 120year old house downtown that was falling down basically.The fair market value from the city tax assessor was 57,000.We sold it to an investor who owns most of the old neighborhood for 50,000. We house hunted for a few months, comparing different houses. We decided on a 3 bedroom 1.5 bath ranch on the NW side of the city.It was first listed at 145,900 then reduced to 134,900 then reduced to 129,900. The fair market value from the city tax assessor is 145,900. Zillow says its worth 161,000. Our Accepted offer is 122,500 with the owner paying 2500 to the closing costs. Keep in mind, we didn't have the giant run up on prices here. Things have stayed pretty level. So what do you think? (Thanks again to everyone who answered my questions these last few months.Your input really helped.) Oh ! yeah ! It is a one owner home who owned it from 1957. I got the fridge, oven,dishwasher,washer and dryer.All newer and in great shape(3yrs new). Basement is fully finished with a giant rec room and wet bar, workroom with benches and vises, and a washroom with laundry chute and a folding table and the above mentioned washer and dryer. The gentleman selling the house is a widower who has had to move to a nursing home. It does need a tub surround and some new shower hardware...and maybe even a new tub just to round things off. BUT, the roof is a complete tear off and rebuild (5yrs old) and it has a newer (3yrs) CARRIER furnace and AC unit...with a fenced yard to boot. The only other bad point is a 1.5 car garage and no other parking but on the street. I plan to build a 2.5 car garage which should only increase the value. Its also 3 blocks from a famous Frank Lloyd Wright landmark. The Greek Orthodox Church of Milwaukee. We are very Happy!

Public Comments

1. Sounds to me like ya did great
2. Keep in mind that the fair market value from the city tax assessor doesn't mean anything. They're never accurate and rarely are even consistent. Zillow is a much better barometer. If you're buying it you'll get an appraisal. That should be the most accurate of all. It does sound like you got a good deal though.
3. It sounds like you did pretty well. You may have held out for a bit more on your downtown house, as most investors will pay more, if pressed. But that also depends on the market there and what other similar properties were selling for around your house. Your new house sounds great, and the prices are amazing there. Maybe I should get licensed in WI and start doing my property management business there instead of here in California where it's horribly high, and I can't even afford to buy a house. Congratulations on your new house! I always love handing someone the keys to their new place.
4. If you are familiar with the neighborhood and are confident it is not in a downward spiral, then you can feel a little more comfortable. But when you can buy a home for so far below assessed value, you tend to want to know why. Was the home itself distressed? Was the owner in a difficult personal financial situation? It's definately a buyer's market in some parts of Wisconsin, so it doesn't suprise me that you could get a good price. As you probably know, assessors use mass appraisal methods. This means that while their numbers are pretty good on average, they can be way way off on any individual house that wasn't part of the statistical sample they actually appraised. When you say Zillow says its worth 161,000. is that an appriaser that did a bank appriasal for this particular purchase, or is it another mass valuation service? If you borrowed money to buy the house, you should have access to a written appraisal that the bank required (and you paid for) as a condition of the loan. Those appriasals tend to be a bit optomistic, but if you got a bank appraisal for more than say $5,000 over your purchase price, you generally did pretty well. Appraisals using good comparables are pretty much the best way to estimate sales price of a single family home in a residential neighborhood. No method can accurately pick a value ahead of time to less than about a 5% variation. There's just no accounting for individual taste and little things that move around in the market. If a home was actively listed for sale at 129,900 for the average length of time that a home is on the market, and it fails to sell, then its not "worth" 129,900 no matter what an assessor or appraiser says. The problem is what does it mean to say something is "worth" a certain amount? A home is worth what a willing seller will pay a willing buyer within a reasonable amount of time. Traditionally that has been 3 months on the MLS system. Whew, a lot of words to say that you probably paid about what the market value of the home really is, unless they just dropped the price to 129,900 and then jumped on your deal of net 120,000. If they did that, you probably bought about 5 to 10 k under market due to an understandably nervous seller.
5. Looks like you got a great deal to me. Did you get the refrigerator to?
6. zillow is terrible at establishing hoe values it does not take into consideration bed and bath or square feet or location the number one reason for prices being higher or lower. The tax evaluation is also not based on market value and even if it is never close to market value. with the information you gave me you could have made a great deal or a terrible deal but the information you used is wrong and irrelevant to establish a homes market value. I would have used a program called REAP or visited a real estate office asking for comparable even if I did not use their service to but the house later on and then I would have looked at sales in the are are they increasing or slowing down is this a good long term investment or will this property remain at this price for the next twenty years. If so buy were the prices are increasing not decreasing in the long term the equity you build on your house is your biggest contribution to your retirement and it has to grow for you to grow
7. First the assessment of from the city means nothing and zillow does not know its butt from a hole in the ground. The listing price of $145,900 tells me it was over priced to begin with and the $134,900 price, it still was over priced and the $129,900 was getting closer to market value of $122,500. What I see is you did not pay over market value and I bet your appraisal comes in around $125,000. I think you did your homework and paid market value.
8. It looks like to me without looking to far into it that you did well. And is just judging by the numbers!!