Home Selling in 08086>Question Details

SJ home buyer, Home Seller in 08086

How much will a short sale in my neighborhood (of similar townhomes) truly affect the value/selling price of my home?

Asked by SJ home buyer, 08086 Wed Apr 21, 2010

When a Realtor pulls comps for their buyers, will they REALLY consider a short sale price as an indicator of what they should offer on my house?

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Hopefully there are standard comparable sales, if not unfortunately short sales have an impact if there are several sold at the same time. Remember it takes 3 comparables to get an appraisal formulated. If there is one short sale and 2 standard sales then the impact is less then 3 short sales and or reo's all sold in the 3 months that the comps are pulled.

i hope this helps
0 votes Thank Flag Link Fri Apr 23, 2010
A short sale that is sold is treated the same way other houses are treated when sold. It is a closed sale and it will be used as a comparable sale. Foreclosures that sell will also be regarded as a closed sale and used as a comparsion. The best advice for pricing your home should come from your realtor. If your are a relistic homeseller, your home will sell rather quickly.
0 votes Thank Flag Link Fri Apr 23, 2010
A property sold as a short sale should affect the value of your home in the same manner as any other sale of a similar property in the area. This is true because the basis of the list price of the short sale property is the recent sales of similar properties in the area. So in a nutshell, all sales at arms length, will affect property values in your area. Just because a property is a short sale, the basis for the list price will still be the market as determined by a comparative market analysis.

Tonya Chakkour
313.920.5406
Tonya.Chakkour@Century21.com
0 votes Thank Flag Link Fri Apr 23, 2010
Keep in mind that agents aren't the only ones pulling sold comps, and others will include the short-sales in their comps whether or not agents do.
0 votes Thank Flag Link Thu Apr 22, 2010
Short sales affect everyone in the community. A single short sale will not have as detrimental affect on the value as multiple short sales will. Good agents will know the property and the condition it was in (which also may have an affect on the sales price for the short sale.)
Buyers are trying everything to get the best price for their purchase so they will take a short sale sales price into consideration when placing an offer. Your best defense against that comp is to be educated about the property to be able to dispute it.
Web Reference: http://www.dianeglander.com
0 votes Thank Flag Link Thu Apr 22, 2010
Hi SJ,

You're really asking 2 questions here and so you shall get answers to both of them.
Will a realtor pulling comps for their buyers REALLY consider short sales when deciding what to offer on your house? Absolutely. If I'm that realtor and I am working for my buyer I will use whatever reason I can find to try to negotiate your price down.

How much will a short sale in my neighborhood (of similar townhomes) affect the value/selling price of my home? Well, you're not selling here, but valuing your home. If this short sale is an outlier, an appraiser can choose to not use it. If the short sale is part of a pattern, there's no way we can ignore it and then it will most certainly affect your home's estimated value.

Hope this helps clear it up some for you.

Sincerely,

Jacobus "Jack" Vollenberg
RE Appraiser - Vollenberg Appraisers
Realtor/REO Asset Manager - Bridgewater Realty
Vollenberg@iname.com
Office (908) 968-0336
Cell (973) 590-0142
0 votes Thank Flag Link Wed Apr 21, 2010
Buyers want a good value, especially in this market. So a short sale is most likely representing the true value of a property. It is a legitimate comparable.

The fact that it was a short sale does not matter. If the seller put down 50% or lived in the home for 10 years and had good equity in the home it would have just been a regular sale but the sales price would have most likely been the same as that reflects the current market conditions.

The fact that it was a short sale is because the buyer did not put much or any money down on the property to begin with. Short sales are done because of low equity position in the property and have nothing to do with the sales price.

Hope that helps.
0 votes Thank Flag Link Wed Apr 21, 2010
Will a short sale in my neighborhood truly affect the value/selling price of my home?

The answer is not an easy one.

If the only comparable sales are short sales, then yes.

If there are many comparable sales, and only a few short sales, then not so much.

Location, condition and upkeep are a huge indication of what will be offered on your home.

Laura Giannotta
Keller Williams Realty - Atlantic Shore
0 votes Thank Flag Link Wed Apr 21, 2010
It alls depends on the makeup of your community. I can think of some subdivisions where most of the sales are bank REO's or short sales. This greatly affects the values of homeowners who are not are in distressed situations.

In short the value of your home is affected by every sale in your neighborhood. What needs to be determined is what's the norm and overall average.
0 votes Thank Flag Link Wed Apr 21, 2010
Yes we will consider all closed sales (not what is for sale) in determining what the buyer should offer because we know the appraiser will. We try to make it a smooth transaction for all parties involved and do not love appraisal issues.The best comps to determine the market value are homes that have sold in your complex. Even if it is a short sale the bank stills want to receive the market value for the home. They hire agents to go out and determine that the price agreed between the buyer and seller is fair. If the bank determines they can get more for the short sale they will counter to increase the price. I believe that the foreclosures are what have affected the prices. The banks totally slashed the prices to get these homes of their books. So if your home is for sale try to get it sold before that short sale closes.
0 votes Thank Flag Link Wed Apr 21, 2010
I think this questions is tricky because it depends on so many variables. If it is a traditional sale I try to use traditional comps, if it is a short sale or forclosure I try to use some ss/foreclosure comps. In my opinion the main reason a short sale sells for less than the traditional comps is because you have a smaller pool of potential buyers that have to be willing and able to jump through more hoops. In my mind it is not because the home is worth less than a traditional sale home. I think that the percentage of short sale and foreclosures in a certain area also determine values. If it is 1 of 10 sales that is one thing, if it is 7 of 10 sales that is another.

I would say an agent listing your home should not pull short sale comps to price your home if they dont need to do so. I do think they should show you short sale comps so you know what you may be up against. Most buyers I work with dont have the time or ability to even offer on a short sale because of time frame or something to sell or whatever. Since the pool of buyers seems larger for traditional sales it makes me think those homes should be worth more.
0 votes Thank Flag Link Wed Apr 21, 2010
No. Short sales stress a market area but it is usually short lived. Unless the area is riddled with active shorts. The selling price should have no effect of your selling price or offering on a standard or "fair" market. If I were your listing agent I would explain this info to you. Provide the comps in the area so you can see the comps. Any offers on your property is handled the same way. Of course ultimately it is your decision to accept or reject any and all offers as they are presented.
you should inform yourself with the areas standard sales and know the short sales. Have all the info on the actives and solds. So when an offer comes in you will be fully versed on any considerations.
Ask your realtor for all this info. and if you do not understand it make an appointment to have it explained.


Search all Bank Owned Homes here Free: http://www.foreclosuresfornewjersey.com


Larry Sarlo
Weichert Realtors
609-868-1171
lsarlo@comcast.net
0 votes Thank Flag Link Wed Apr 21, 2010
The buyer's agent will certainly try to use it to their advantage as your agent will try to explain that it may not be a suitable comp due to condition or the fact that it is a distressed sale. Comps should be homes sold between a willing buyer and seller at an arm length transaction. That is where neither party is under duress, which a short sale party truly is. It would be nieve to say that it does not affect the selling prices of the surrounding homes even given the above facts. If your home is already listed for sale, you should contact your agent and discuss your concerns with them, if not I would be happy to talk to you with no obligation on your part.
0 votes Thank Flag Link Wed Apr 21, 2010
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