Realty Counselors, a Los Angeles-area real estate brokerage and mortgage company, has launched automated valuation tools that calculate which homes are the best bargains in a given area and which homes can potentially be profitable for investors to purchase and rent out.
The "BargainScreen" and investor tools are based on data supplied by multiple listing services in the region, said Armen Gukasyan, broker and president of Realty Counselors Inc., based in Granada Hills, Calif.
Gukasyan said the tools offered at the RealtyCounselors.com site allow prospective buyers to pre-screen MLS-listed properties. "We do the initial legwork for the clients. The tool does the analysis," he said, and potentially narrows the list of properties that site users sort through.
Users can choose a value for the estimated percentage below market price of a home’s value based on its listed sale price and the company’s algorithms for its actual value. And search results can be sorted by this percentage or by other variables, such as list price, number of bedrooms or bathrooms, and ZIP code area.
A sample search identified a Pacific Palisades, Calif., home with two bedrooms and two bathrooms that has a list price of $329,000 and an estimated value of $927,890 — an estimated 64.5 percent savings.
As with other automated valuations, there are degrees of inaccuracy. "Like with any automated system it obviously can’t be 100 percent accurate," said Gukasyan, adding that the BargainScreen tool has an estimated accuracy of 60 percent to 70 percent. The algorithm was built in-house by the company’s development team, he said.
Certain neighborhoods in the Los Angeles region have seen substantial value declines, and he noted that the tool is based on past data and doesn’t calculate future valuations of the property. The tool can’t, for example, predict whether a property that is listed as a good bargain will actually appreciate in price in the short term.
The site’s investor tool calculates the estimated monthly mortgage payment for a for-sale property and the collectable monthly rental rate for that property. A property in Canyon Country, Calif., is listed for sale at $119,000, which would work out to an estimated monthly mortgage payment of $685, according to the site. The estimated collectable rental rate for the property is $1,798 per month, the site estimates, for an estimated rental income that is $1,113 higher than the monthly mortgage payment.
Gukasyan said that he has seen an increase in interest from investor clients as opposed to buyers of primary residences these days.