When is the value of a home NOT what a buyer will Pay?
When you're buying or selling a short sale... I'm actually not sure this is a bad thing to be honest.
On a recent short sale my contact at the bank let it be known that when attempting to detemine market value THEY will not allowÂ agents doing BPO's to use foreclosed propertiesÂ toÂ set value. In this instance it was problematic. There were no comps otherwise and the like comparables were different character. Advice to agents, if you ahve this problem request a formal appriasal.
I was thinking about what sort of flawedÂ market manipulation this was until today.Â CompetingÂ homes in an area I farmÂ are in freefallÂ for no appearent reason.Â So there were some regular sales in the area recent closings at 599k, several in fact. At the beginning of the year there was a sale at 725k, until a self proclaimed short sale specialist came in and took a regular sale of a similar home at 640k. That soldÂ rightÂ away,Â then the market held solidly in the high 500's. With pendings still in this range the market seemed to settle. But then a forclosure came on at 499k. A couple regular sales went into contract in the mid 500's and newÂ short salesÂ came on at 510k, 499k, 475k. The 475k short sale moved fast and a new short sale listing now came on today at 449k. At these prices Walnut Creek homes are now listed below similar priced homes in nearby Concord, an area whose median income isÂ significantly less thanÂ affluent Walnut Creek. This sort of salesmanship is simply not good for us since one aspect of our job is to provide value for our services. If the home selling population just wants to sell price, why do they need agents?
After the initial rush of anger at the bank, I am now more sympathetic about the banks policy of consideringÂ short sales more like regular sales than foreclosures.