How to determine if a Given Lake Chapala Ajiic Home is a “Good Deal” or not!

How to determine if a Given Lake Chapala Ajiic Home is a “Good Deal” or not!

# 1

First, find yourself a good Exclusive Buyer’s Only Realtor so you know the analysis he/she will give you of the value of the home is given with your best interests in mind.

#2

Will your Realtor look at the best comparable properties?

#3

Will he/she do his/her best to investigate the seller’s motivation or need to sell and therefore determine the flexibility that is built into the asking price?

#4

Will he/she be able to pull on many years of experience in negotiating real estate deals to find creative alternatives that will satisfy the seller so you get the absolute lowest price possible…

or is he/or she just a personable person selling and listing real estate here as a hobby… or perhaps the agent is a younger bi lingual agent who is working to do his/her best to feed his/her family and needs to earn that next commission a bit too much?

Well, you get the idea, Of course you want your Realtor to be knowledgeable and nice and easy to deal with and responsive to your needs…but the single most important thing is that he /she  BE REALLY ON YOUR SIDE.

One of the techniques your Exclusive Buyer’s Only Realtor should do to try and get a fair value as a starting place for negotiations in addition to the best comparable sales data available will be a replacement value estimate (a bricks and mortar analysis)

Remember however to use more than a “bricks and mortar” analysis. A given home upon analysis could appear not to be a ‘good deal’ when in reality it might be a good deal “for you”.

What do I mean by this? Well, if you could build the same home for less money in theory this may appear to make the subject property look bad by comparrisiond.

Well Maybe yes and maybe no… but probably not.

Consider these factors: If you valued the land at say $213 USD per sq. meter or $19.78 a sq. ft. and the lot the home is on is small so the land part of the purchase may not account for much of the value.

Let’s assume the lot is 130 meters x $213.00 USD = $27,690

Now if you value the cost of a new home with the same amenities at say $100 USD per square foot.

And. the house is say 1,000 sq. ft x $100 USD = $100,000 USD to build the house with the same amenities.

So, adding the two together you come up with $127,690 USD

The home is older and you feel like you should discount it some for age since the plumbing and electrical systems are older etc. so you discount it by some factor you feel is appropriate and decide that the bricks and mortar plus land makes the value $125,000 USD..

You may determine you should not have to pay over $128,000 USD but the asking price is $145,000 so this seems high given your analysis, right?

But, before decide to make an offer for under $128,000 thinking that you can always come up to $128,000; please consider the following:

Is there another small lot in the area you could build on? If the next closest lot is much larger and no sub dividing is possible you may have to pay significantly more for the lot.

For example if the closest lot is say 260 meters x $200 = $52,000 then the lot to build on will cost substantially more.

You prefer to rent nearby to be able to monitor the construction and consult with the builder so assume the rent in the neighborhood is $800 a month (the same you think you could rent the already constructed home for that you’re considering)

You’re told it will take 8 months to build the house you want on the lot that is available.

So $800 USD x 8 months = $6,400 USD for rent.

OK, let’s add up the cost of duplicating (as close as possible) the already constructed home you really like)

Construction…….$100,000

Lot……………………..  $52,000

Rent…………………..  $  6,400

__________

New House        $158,400

Now the asking price of $145,000 looks a lot better doesn’t it, since the extra land you would have is more than you want (read higher taxes, higher development dues, more gardener expense) and can’t be sold off separately…  and you’d just as soon not be tied up with construction headaches for the next 8 months.

By the way I think you could have bought the hypothetical property above for probably $135,000 which would have been a 6.8% discount from asking price… or we may have done even better depending upon just what we learned in the rest of our analysis.

Obviously I’ve made certain assumptions in this example and no two situations are the same. The point is to just do a real world analysis and not just a quick paper analysis.

Consider all the factors.  You can do it, I can help.

Put my 40 plus years of negotiating real estate deals as an investor, broker, and attorney and now as an Exclusive Buyer’s Only Realtor to work for you!

Sid@ChapalaClub.com

Oh, one more thing. I’m not a “Hobby Realtor” and I’m not a young guy who’s struggling to feed his family. I’m just a super service oriented guy with a stack of credentials who has your best interests in mind and has a ton of glowing testimonials to prove it to you which are available.

So, e mail me today. Let’s get started on your new life !

Sid@ChapalaClub.com