Home Selling in Bolingbrook>Question Details

Laura, Other/Just Looking in Bolingbrook, IL

Foreclousures in my neighborhood, house under contract, how will apprasial work?

Asked by Laura, Bolingbrook, IL Thu Sep 15, 2011

My home in just went under contract. We agreed on a selling price of 186K with the buyers. However, there are several bank owned homes that have sold in our neighborhood over the past 12 months. The same model 3 doors down was bank owned and sold for 158K. There are a few other homes that were bank owned that sold for anywhere between 150-170K We are thinking the apprasial is going to come in low due to the neighborhood foreclosures.....what do you all think?

The last non-bank owned or short sale transaction just occurred in August and that home sold for 175K and it has 300sq feet more than hour house! Prior to that the last regular sale was last OCT for 195K

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5
Hello Laura,
Unfortunately, your situation is one that many are facing right now. However, most good appraisers will take an apples to apples approach. They will look for properties that most resemble your property in terms of condition, style, and size. However, they can not skip over something on your block even if it was a short sale or foreclosure, so unfortunately, they will have to assess it as well. Hopefully you property is in better condition and they will make price adjustments based on that. These types of transactions are 50/50 depending on who the appraiser is. I would begin considering what your bottom line number is, in the event the appraisal does come back short, such that you have given it some thought before hand and you are not forced into making an emotional decision, vs. a rational one. If you have a solid buyer, it may make sense for you to take a little bit of a price cut, based on appraisal if needed, rather than waiting on another buyer to come around and possibly having the same thing happen. Of course your reason for selling will play a big factor in your decision as well. Hope that helps.

Cecelia Marlow
Chicago Bancorp
Mortgage Banker
312-738-6294 direct
0 votes Thank Flag Link Tue Sep 20, 2011
Laura,
You may have a slight issue, Id make sure the appraiser knows of ALL upgrades you've done to your home and see if the selling agent can run comps for you to give the appraiser this will also help if there are other homes on the market at similar pricing the appraiser will look at what else is on the market too. The buyer hopefully has good amount of money to put down and this wont be an issue for you!
Loads of luck!
Deneen Ruffolo
Realty Executives-Darien, IL
630-430-2128
0 votes Thank Flag Link Fri Sep 16, 2011
Laura -

That is the real pain of all independent sellers these days. Competing with the distressed homes is hard enough, but when you can get the deal, will the appraisal come out. Appraisers are supposed to factor distressed homes with a lesser consideration that non distressed homes, there is supposed to be a formula, but they will consider them. Unfortunately, there is not a lot you can do until the appraisal comes out. As the homeowner, you can talk to the appraiser when they come about all the upgrades in your home and all the things you have done to it that makes it worth more. Don't push and don't ask them about their appraisal or the distressed homes, etc. just give him or her the tour.

If the appraisal does not come out favorably, talk to your lender, they can look at the appraisal and if there are mistakes or things overlooked, sometimes they can ask for a new appraisal. For instance, if the comps did not consider any non distressed homes or if upgrades or other cirmcumstances were not considered for adjustment. Or sometimes if the appraiser is not familiar with the area - from a completely different area.

Unfortunately, if there are only distressed comps, that is going to be tough. good luck!
0 votes Thank Flag Link Fri Sep 16, 2011
Not sounding that promising and totally depends on that appraiser. Condition of other houses are a factor. See if your Realtor® can provide any comps that the appraiser may take with them(hopefully). Best of Luck
0 votes Thank Flag Link Fri Sep 16, 2011
Laura,

Your concern for recently sold distressed sales in your neighborhood are real. They will have an impact on your home's appraisal but the degree that this applies depends on a number of factors including the appraiser, overall neighborhood, condition of the home etc.

If your local market is continuing to slide it would be reasonable to expect that the last regular sale nearly a year ago of $195,000 would be significantly less today. With only the information you have provided, it is reasonable to expect a window of between $150,000 and $190,000 ...... possibly under $170,000(a guess).

The thing to keep in mind here is that the those foreclosure prices had to be justified. This was likely accomplished by either broker BPO's or appraisals. If this is the case, it may be that the recent foreclosure numbers are closer to today's market value than you want to believe,

Good luck,

Bill
0 votes Thank Flag Link Fri Sep 16, 2011
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