Appraisals when comps are foreclosures/short sales

**jimss** · 10-20-2011, 05:52 PM

I'm looking at a house and I know that the last 4 homes to have sold in this subdivision were foreclosures. This house is a private owner. Of course the foreclosures were about $40k below than the price that they have agreed to see me this house. When the appraisal comes in for the house I want to buy will it come in near the sales price? Or the price of the foreclosures?

**Greg** · 10-21-2011, 05:11 AM

If foreclosures are the only sales comps the appraiser can find then they will use them to do the appraisal. If the foreclosures were similar in size and condition then the appraisal will come in at the foreclosure value.

If the foreclosures were not in good shape the appraiser will adjust the price according to the condition.

A house owned by a private seller has no more value than the same foreclosed house has given the condition is the same. It is not fair to the seller but no one ever told me life would be fair.

**jimss** · 10-21-2011, 06:26 PM

So none of the non-foreclosure homes will ever appraise high enough to sell. I see now why people are walking away from their homes. There is no other choice due to the appraisals.

**Notactingmyage** · 10-26-2011, 10:26 AM

My experience (as a successful "retail" seller in a depressed market with several foreclosures and HUD owned properties in the area) is that a good realtor will work hard with the appraiser to demonstrate why your property is worth the agreed selling price while the others are not. You have to do your part too, often by providing voluminous documentation of improvements made and the differences in features and condition (doing so worked for me). Armed with that data, a good realtor should be eager to get the deal done by being a strong and persuasive advocate for you.

**Johnny Brooks** · 10-26-2011, 08:59 PM

Unless you are willing to make up the difference in price or the seller is motivated to sell
at appraised value, you should probably consider waiting for a home that is actually
available.