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Considering buying a relative's home, need help on evaluating a fair price.

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  • Jun 22nd, 2014 6:57 pm
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Jr. Member
Jun 24, 2012
125 posts
6 upvotes

Considering buying a relative's home, need help on evaluating a fair price.

Long story short, my cousin is about to sell the house that we're living in, which was brought for in 2009 for 300k. Rather than going out to house hunt, finding a place to rent, etc, I am considering about buying out the place from her. She's already had an agent come to give a quick 5-10 minute look and the agent said that based on a similar house down the street, my cousin can expect to sell it for ~420k. Being totally newbie to the property buying scene, what are the next steps I should take in properly evaluating the house to gauge true market value rather than the agent's quick assumption of it?

Some quick facts:
-Appliances in the house need to be replaced.
-Washrooms need to be touched up.
-Basement needs to be totally rehauled; carpets are outdated and there is water damage to one side the drywall due to washing machine leak problem.
-Vast majority of the doors, both insude and out, need to be replaced.
5 replies
Deal Guru
Oct 6, 2007
11213 posts
10058 upvotes
Kootenays
Get an appraisal done by a qualified appraiser. Also get a home inspection done, perhaps before the appraisal, so the appraiser has access to it.
Jr. Member
Jun 24, 2012
125 posts
6 upvotes
Any recommendations for who to use for these assessments?
Deal Fanatic
User avatar
Apr 4, 2009
7698 posts
794 upvotes
North York
smacd wrote: Get an appraisal done by a qualified appraiser. Also get a home inspection done, perhaps before the appraisal, so the appraiser has access to it.
Appraiser is rarely accurate with regard to market value. Agent is better than appraiser for current resale value.

OP ... you better tell her ASAP, you want the house. Once she signs the listing agreement, she normally must pay the full x% commission, even if you buy it from her.

OP ... you better quickly get acquainted with the neighbourhood price. If $420K is about right, then see if she will take $400K in a private sale (with a home inspection clause of course.)

In terms of what needs to be done ... if the agent's $420K took this into account, you can only try to ask for lets say $5K to fix things up ... but if she is going to give you full credit for sales commission, you really shouldn't ask. This is why, you need to go to a few local open houses ASAP, and see what condition those are in and what people are asking. (If the house is right ... cosmetic updates are to be expected.)
Deal Fanatic
User avatar
Dec 10, 2008
5211 posts
2024 upvotes
Look at comparables and figure out the price yourself. Only a fool would rely on a 3rd party for an accurate quote whom they have no intention of paying.
Let's hug it out
Deal Expert
User avatar
May 10, 2005
36997 posts
11419 upvotes
Ottawa
I agree, get an agent or two to evaluate fair market value.
Also, go to the bank and ask for a mortgage, they will do their own assessment.
Make sure both you and your cousin agree on the agent or better yet, let him get the agent.
“Those people who think they know everything are a great annoyance to those of us who do.”

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