Home Buying in South End>Question Details

toronto1morr…, Home Buyer in Tacoma, WA

Are the banked owned houses bringing down the prices of house's in the area?

Asked by toronto1morris, Tacoma, WA Fri Jun 22, 2012

Noticed prices are not on par with none banked owned price hence my belief is that as a result are causing housing prices to drop considerably

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If certain areas are heavily in short sale or bank owned, yes, a buyer can have trouble come appraisal time. However, there are neighborhoods in every town that have had value drop, but are not in the type of shape that would cause appraisers to not appraise at asking price. Appraisers use a formula that includes a radius of where the home is located, like square footage, building materials, and neighborhood condition. If for some reason your home didn't appraise, you as a buyer could work with the seller to negotiate a new price, or if you felt the price was fair, you could suggest coming in with more funds, or you could have the Realtors request a re-evaluation--I have done this before. We give the appraisers comps that show the home's value.
1 vote Thank Flag Link Tue Oct 30, 2012
Toronto,
Bank owned homes should not be used as direct comparables for non-bank owned homes unless they are the only options. When they are the only option, adjustments can be made by a good appraiser for condition and other factors that would cause it to sell for less than a conventional sale.
The distressed inventory will continue to have some effect on the market until it returns to a more normal level in a few years, but remember too that bank owned properties come with some level of risk.
Banks never lived in the homes; therefore any disclosure made by the banks will be limited to useless to the buyer. Bank owned properties are generally in poorer condition than conventional homes. The previous owners are typically in financial distress and put off maintenance and updates a private party would do to maximize their value.
I can't speak for Tacoma, but many markets north of you have a shortage of inventory and are seeing multiple bids for well presented, well maintained and properly priced homes. As a buyer, your local agent will be critical to evaluating the value of any home you are interested in and providing you with good data to make a good purchase decision. Just because a home is or is not bank owned alone does not make it a good or bad investment.
1 vote Thank Flag Link Fri Jun 22, 2012
great to know. I personally am not interested in any homes that are bank owned/only in the conventional homes. Thank you for the information,
Flag Fri Jun 22, 2012
That's a loaded question. Banks owned properties sell for less, and are competition for normal listings, so they do have a downward impact on values. Non-bank owned, non-short sale listings will, however, sell for more. And a smaller percentage of bank owned listings is actually increasing the median!

http://www.trulia.com/blog/kary_l_krismer/2012/05/king_count…
0 votes Thank Flag Link Fri Jun 22, 2012
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