Obtainer Trainer!

It is said that profit is made when you buy a property. That means if you obtain it for the right price, you will be able to extract your profit when you sell it.

Of course, you must not pay more than the property is worth. But, how do you determine what a property is worth?

Utlimately, a property is worth whatever the buyer will give you and that you will accept. Along the way, everything else is a guess. Some guesses, though, are closer to the value than others. There are various measures against which you might estimate the value of a property. Among which are:

1. The Tax Assessor's Valuation. Every jurisdiction has a tax assessor who places a value on a property to determine how much property tax the "owner" should pay that year. Owner is in quotation marks because no individual ever truly owns their property. They lease it from the true owner, the government, when they pay their property tax. Doubt that. Fail to pay your property tax at your peril.

Sidebar: the common thought is that the "real" in real estate means its not imaginery. Not so! That real is the Spanish word for "king". Real estate means the king's property.

Happily, because there is so much real estate and relatively few tax assessors, the tax assessor's valuation is frequently less than the true market value. That rule, as with any pertaining to real estate
is not written in stone. If a prior occupant has trashed a dwelling, the tax assessor's value may be significantly higher than the market value.

2. The BPO (Broker's Price Opinion). This is what a bank estimates an REO (real estate owned) on their list might be worth. It is often the result of an inexpensive and cursory comparative analysis.

3. The CMA (not the Country Music Awards, but the Current Market Analysis). This is a more detailed comparative analysis which takes into consideration the square footage and location.

4. A Certified Appraisal. This is a more detailed than the CMA. It is detailed, multi-paged, analysis with quantifiable evaluation of the property and its systems (heating, plumbing, power, etc.) based
upon recent sales in the area.

5. Drive-by appraisal. A value as competent as the the cursory look the beholder's experience allows.

6. Comparative valuation as derived from various internet websites devoted to that task.

7. FHA appraisals, and even more stingent, VA appraisals, done by approved certified appraisers are the most comprehensive and regulated.