Newsgroups: misc.consumers.house
Subject: Re: Fair price for a house with no nearby comparables?
From: "David W." 
Date: Sun, 07 Nov 2004 07:48:51 -0600

edrobertsjr@yahoo.com (Ed Roberts Jr) wrote in 
news:e6e6b88d.0411062150.3a6ff805@posting.google.com:

> I want to determine a fair price for a house with no nearby
> comparables. Factors that make it difficult to put a price on this
> house include:
> 
> * by far the largest house in a small community;
> * hasn't changed hands in an arms-length transaction since it was
> built over 100 years ago;
> * hasn't been occupied for over half a century (although it has had
> the roof replaced in the last 30 years); and
> * has very little electrical wiring and indoor plumbing. Buyers will
> have to do a lot of work.
> 
> My guess is that the house could be valued by finding comparable
> houses in completely different locations that are similar in as many
> ways as possible to this house's location, including population and
> median house values. If I guess wrong, let me know.
> 
> In trying to find someone who can do this kind of complex analysis,
> I'm drowning in all the advertisements from people who will do the
> easy kinds of analyses for free (i.e. several very similar houses that
> have sold recently within a mile or two).
> 
> Does anyone have any suggestions?

Estimate the value of the house with the improvements you plan to make 
(cleaned & painted, new roof, new electric, new plumbing, siding, 
insulation, etc).

Estimate the cost of the improvements,

Subtract the cost of improvemtents from the estimated value after 
completion.

That number should represent the current "value" to you as a buyer. That 
number may bear no resemblance to the "value" as defined by the seller. 
It's just the price you could pay today and expect to break even after the 
repair work.

Note that if the house has been vacant for 50 years, you'll want to have 
someone very experienced in old-home renovations inspect it very carefully 
- it's likely to have lots of issues related to lack of maintenance (water, 
insects, rot & decay, etc.)