Should I buy this Simi Valley home for this price?

Asked by homebuyer123, Simi Valley, CA Mon Apr 2, 2012

I'm interested in this home...

http://www.redfin.com/CA/Simi-Valley/4794-Summit-Ave-93063/h…

The home is in a nice location north of the freeway. Although most homes in the area are in the 70s, I was impressed by how well they are maintained. Also, the home is away from major streets, and doesn't have any immediate neighbors to the left and behind it. The kitchen and all bathrooms have been fully remodeled.

Although the home has been remodeled, the contractor work inside was somewhat poor. For example, there are grout stains and misaligned crown mouldings in several areas. If I count all the goods and bads, I'd give the contractor's work inside a 6.5 out of 10.

The house sits on a slope with a metal fence at the very bottom, but it would definitely need a brick fence in the backyard. I'd also have to invest in shower doors and window shutters.

Is 475k a fair asking price for this home? Will it appraise? Also, I'm afraid a nice brick wall would cost me an additional 10k .

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Bonnie Sterling’s answer
Bonnie Sterl…, Agent, Simi Valley, CA
Mon Apr 2, 2012
If you are looking at this home and asking about writing an offer I have to presume that you HAVE a Realtor So I will provide some general information for people who are reading your questions and wonder about the questions

People, If you are not confident that you have the right Realtor, the one that gives you enough information to be answering these questions and sorting out the options withyou, you should probably use different Realtor. If you havent written the offer yet and you havent signed a buyers agency agreement, you can use whomever you like for your purchase. There could be some issues with procuring cause because someone has already shown you a property but you wont want to go through the stress of an escrow with someone you dont feel confident in already and if they are busy successful Realtors who havent connected with you, they will probably be willing to let you move on to working with another Realtor because they really dont want to be in escrow with you for 30-45 days. Not that they should want to be bothered with answering 101 questions, they absolutely should but just that it is not productive to work without a certain level of trust and confidence, both ways.

In general, it doesnt make sense for Realtors to bring a lot of data with them to each home you look at because many buyers walk in and immediately know if they are going to rule a home out. However, if you are interested, If you ask your Realtor or if they know your level of interest, they should have given you this information about the prior sale and comperable sales data. They would be able to give you other data to help you work on the comparison with your trusted professional, the one you hired and you are paying to help you make your dream of your next home come true. They would also be able to advise you that most of the time buyers retain the appraisal contingency in the contract so when you ask "will it appraise" you would be comforted by the fact that if it didnt appraise, you would not be obligated to purchase, and if you had concerns about the home appraising, you could structure the purchase to do the appraisal first and then spend money for the inspections. You could even structure the offer to have agreements about what will occur if the home doesnt appraise, for example that the seller will reimburse you for the cost of the appraisal if they are unwilling to sell for the appraised value.

You can procure bids for things like brick walls during your contingency period but I would also recommend looking into vinyl fencing.

Lastly, in response to another homeowners comments, Zillow, which is another forum I like and participate in in many ways, is not a comprehensive price evaluator. Zillow uses an algorithm based on a radius. It is not specific to tracts, condition or features so using a Zestimate to determine a property value is a very casual way to get a round about value but it can steer you wrong, in either direction.

Good luck with your home buyer process and make sure you will love living whereever you go. It's important to get a good value. A value is different from a deal. A deal is a really good price for a property, even if it's located on a major street and has other issue. A value is something that looks at all the components of value for you like location that suits you, condition that suits you, lifestyle that suits you, a place to call home for you and yours all at a price that felt fair and equitable. Find a great value in your home purchase. I can pretty much bet that if you are asking yourself these questions you arent looking at a property and home that represent a good value for you.
1 vote
homebuyer123, Both Buyer And Seller, Simi Valley, CA
Mon Apr 2, 2012
Thank you all for your answers. Very helpful.

Regarding price, based on the feedback, I think 475k is overpaying it. I agree with Bonnie - value is very important, and you should buy the house that suits your taste and lifestyle. Based on that, I wouldn't mind paying 475k if the house had a really amazing remodeling work. But like I said, not only the remodel is unfinished -- no backyard fence, no shower doors, no window shutters, really old concrete, missing parts -- the craftsmanship of the kind work was done inside is clearly not that great. The flaws are visibile - seams, stains, low quality flooring, etc. Let's assume the seller cuts a deal and sells it for 465 or 460k. That house would still cost me 485k-490k because I'd have to invest a good 20k to finish it.

Unless there's something absolutely amazing about the street or neighborhood I'm not seeing, I'd expect a 475k remodeled home in that area to be very impressive and fully ready to move in.

The issue here is not whether I trust my agent or not. He's a good guy and very knowledgeable. I'm just looking for different opinions. There are so many factors involved in the decision making process that it's important to hear what others think. Most of you guys said great things I didn't know or thought about.

I understand I can negotiate low appraisal or inspection issues during escrow, but I'm the kind of person who prefers not to even start the process if I'm already getting a bad feeling from the start. For the biggest money investment of my life -- buying a house -- my overall approach is simple: if you're in doubt, don't do it.
0 votes
Ted Mackel, Agent, Simi Valley, CA
Mon Apr 2, 2012
I have to echo some of what Bonnie has stated. If you are working with a Real Estate Agent and asking these questions on an open forum like this, I am curious to understand why the lack of trust in the advise of your Agent and if there is such a large lack of trust, what continues to motivate you to continue that relationship. I notice you asked many questions related to the sale of your home as well.

Summit is a New Monterey at the top of the Texas Tract below The Crest (Wildhorse Canyon) I live pretty close to this tract. I have friends that live on one of the little cul-de-sacs that are off Summit. The New Montereys were built in 6-7 different areas in Simi Valley. The floor plans really do not vary much. The single story floor plans are very functional.

This is a flipper as pointed out, if the workmanship is not that great on the surface appearance then make sure you go to Building and Safety and ask to see the permits file on the property. Consider running a camera down the main on the sewer. I just advised a client to do this on an older house and we found a broken main. Drains were not running slow, but I grew up in the west valley and have lived in Simi since 1986 and there are still some lingering effects from the 94 Northridge quake. Also you never know if these older houses had large trees in the yard at one time. The roots have a way of getting through the clay pipes. And some tracts have orangeburg as incredible as that may seem. Also on these foreclosures/flips you never know what the prior occupants did on the way out. I have a pretty good list of stories. Interesting things when representing buyers.

An appraisal is going to use three closed sales that are close in age, size and upgrades. If the same floor plans have closed in the area, the appraiser will adjust those to bring them up or down to value on the property you plan to purchase. If they can't get the other houses to come up to value on this property, then you have to go back to the seller and see if they will take less in the case that it appraises low. Zillow, Trulia etc. are not reliable for the appraised value. They may provide a starting point, but that is about it.

There are two closings on Granville and one on Sunglow that can bring in a $450k appraisal - that is pushing the one mile limit but it is the same builder. An appraiser cannot skip over like properties for other comps so it would be interesting to see if they could go out to those closings.

I am pretty sure I was in that house about 5 or 6 years ago and the back yard had several issues with the hardscape and grading at the time. A block wall at the bottom of the grade would be something the you need to think about, if you want it to retain any of the slope then the price of the wall will go up. Make sure you know where the easement lines are for flood control before you put the wall in.

It is easy to find a Real Estate Agent to show property. It is a whole other situation when you find a real estate agent that not only knows the tracts you are interested in, but has a background in construction, dealing with Building and safety, city planning etc. We all have different skill sets. I encourage you to ask these questions with the person that is representing you now, they probably have a better handle on your situation than is coming across on Trulia.
0 votes
Blake Costa, Agent, Westlake Village, CA
Mon Apr 2, 2012
Hi,

This house is an investor flip. They bought it for $245k and really made it look good! I looked at this house back in Dec. with a client and we subbitted a few offers as well. It's definitelly a good buy but not for $475k. If I were you, I would offer around $420k and go from there.

Hope that helps. If you have any questions feel free to give me a call.

Thanks,

Blake Costa
(805) 300 5815
Troop Real Estate
DRE#01885709
0 votes
Janey Bishop, Agent, Calabasas, CA
Mon Apr 2, 2012
You should work with a realtor. You are a savvy buyer but this is a large investment and the Seller pays the commission.

This is a flip so they have done cosmetic work but you need to know about the major systems too. The price is good but they aren't giving it away. But if you can lock in a good price, a good interest rate and live where you want to live it is worth looking at even closer.

If you would like an experienced team on your side let me know. We'll meet you out there this afternoon.

Janey Bishop
Rodeo Realty - the Signature Team.

(818)570-1144
0 votes
Jeff Smith, Agent, Thousand Oaks, CA
Mon Apr 2, 2012
I am happy to help you negotiate. I can send you a full report on the market and what I would offer for the house. However I will need additional details etc. Great Advice comes with a price.
email info@presidiorealestategroup.com
0 votes
Homesand.net, Home Owner, California
Mon Apr 2, 2012
Its estimate value is $397K per trulia.com
http://www.trulia.com/homes/California/Simi_Valley/sold/8289…
And $386K per Zillow.com
http://www.zillow.com/homedetails/4794-Summit-Ave-Simi-Valle…

However, contact with a good local realtor to to do a Comparative Market analysis.
0 votes
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