Thread: Short sales typically sell for ~15% less than regular sales?

If all the other condos sold as short sales then an appraiser will have to use them as sold comparables when they do the appraisal for the buyer of your condo. This means that these short sales have set the new standard and your condo is worth no more than the rest. Sorry.

Appraisers are required to use "at arms length" transactions for comps. If not they are not performing their job correctly. These words mean that comps should be sales at market value, offered for sale by a willing seller and purchased by an able and willing buyer, with neither party under duress. Even if condos in your unit are short saled they are not "at arms length" comps. An appraiser would need to find other comps even if they are just within the area and not at that specifc complex. If they are not able to find good comps and utilize either a foreclosure or short sale they should be noting that information and stating they are not high quality comps.

In your case the realtor may be right but I don't know enough about your market to make a definitive statement. It is possible there are no other quality comps thus the short sales are all that is available. You need to get several opinions and ask about other condo sales nearby over the past several months.

Regardless of how an appraiser determines the value of your condo, buyers are going to look at recently sold comparable condos and they are not going to care if the other condos in the same complex were short sales or foreclosures.

Buyers look at price first. If your condo appears overpriced to buyers, they may move on to other condos and not give your the attention it deserves.

That is not always true. Buyers have Realtors that also have access to sales price and short sale information. They will realize the situation and may try to low ball you, but the people that know that information are the ones to ask, not internet individuals not familiar with your market. Here in Houston short sales don't necessarily drive prices or appraisals even for condo's.

If 30% of the comps are distressed properties (foreclosures/short sales) then the appraiser is required to use distressed properties in the appraisal. The OP stated that all of the sales have been short sales thus it sounds like the 30% threshold has been reached. Talk to an appraiser if you doubt this.

Here, they use short sales and foreclosures in appraisals and our distressed market share is just under 30%. It sucks but that is the way it is.