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I have the opportunity to buy the apartment I'm currently renting directly from my landlord, saving brokers' commissions. The challenge is finding a qualified, neutral party to put a price on it.
My hesitation with engaging a broker is that they would tend to put a high number on it, in hopes of still getting the listing.
What's a good way to determine fair market value, say within $10,000 either way? There are recent comps in the same building, same square footage but better shape than my place. It just seems to me that a seller is always going to think high, regardless of comparables, until the market dictates otherwise.
You already answered your own question regarding comps in your building as a guide. At the end of the day it is whatever you and the seller agree is a fair price. You could hire an appraiser to do the comparisons for you, however you could hire 3 different ones and they would come up with three different prices.
Sellers will always want more. So if you are going to make an offer, show the comps, adjust slightly for condition and floor and prove out why you are bidding a fair price. If he is not happy with it you are not going to get anywhere by having a third party involved.
Don't forget to share the savings the seller will realize by not paying a broker.
e.g. if the fair value is $500K, typical broker commissions would be $25,000 to $30,000, so that's $475K net to the seller; you offer $490 and you both do better than a brokered sale.
You could 1) hire a broker who will do a valuation with comps for a consulting fee (I wouldn't do this in Brooklyn, but there are people who would; or 2) hire a residential appraiser, which is usually the route the parties go in FSBO sales.
DG Neary Realty
Thanks Ali. I think a residential appraiser would be the way to go.
In my head, the only relevant comps are units in the same building (there are two that have sold this year in the same 60 unit complex.) Using other sales in the neighborhood only really gives an idea of a potential 'listing' price. But places in the same building also factor in the building itself and its pluses and minuses, all have the same materials and finishes, so the only difference really is the individual improvements owners have sunk in to the property.