You do however, need to consider if there are many foreclosues in your area. The area may be considered declining in value and as a result there will be an indirect affect on the value of your property.
Clear as mud ...right? Let me draw a parallel; one bad apple, does not mean all the apples in the basket are rotten. However, a basket of rotten apples will make your shinny new apple suspect and affect the risk a bank (or appraiser) is willing to take. Make sense now?
Brian McGreevy, Broke/Owner
Sarasota Home Realty
You are experiencing one of the fundamental challenges of residential property valuations where your home's value will be directly impacted by the price of a sale of a similar property in your neighborhood. If your home has similar Type, size (plus or minus 300 sqft), age (plus or minus 5 years) and similar floor plan (no exact match needed here); then this recently sold town home will be available as a COMP when you try to sell your property or try to get a loan on it!! It becomes an "anchor" comp which will help define how much a lender is willing to loan you on it, or how much a buyer will be willing to pay for it.
But the news is NOT all bad. If this property has sold more than 6 months ago; most lenders won't accept it as a comp. However, if you are in a declining market, the news could be worse since there are more distressed properties coming to the market and they will indeed depress the value of your home as well.
That's why we are seeing a lot of strategic defaults where properties are so far under-water that it doesn't make sense for owners to hold on to them. You can visit our website to search for any more upcoming auctions around your property by visiting:
By itself - - - it would have no effect and nothing to do with the resale value of yours. Unless your property is also a foreclosure. If there has been multiple foreclosures sold recently, and multiple current active foreclosure listings, of townhomes, in your neighborhood, then combined they may or may not have a negative impact on your resale value.
What affects the resale value of your property is the current market condition and trends, of multiple similar properties in your neighborhood (townhomes) and market area. Most likely, the overall market in your neighborhood/market area has declined over the past couple of years, similar to that of other market areas around the country. Mostly due to the increase of distressed properties (short sales, foreclosures) and increase in supply.
If you were to currently put your property on the market for sale, depending on when you purchased it and the amount of the purchase or mortgage, you may or may not find yourself "underwater" as they say. Where your current market value is less then what you purchased it for, or the balance of your mortgage if you have one.
In any case, the resale value of your property, or current market value, would most likely be determined by the sales comparison method, and current active listings among a long list of other factors, of similar properties, and analysis of market conditions and trends, for your type of property and overall market area.
It means that your home or townhome has decreased in value also. I live near you and my townhome has decreased in value from the high 500k's to around 390-435k depending on the condition. So if you do not have to sell DON'T if you DO have to sell, there are ways that are inexpensive to make your home more attractive to buyers and might increase your value.
If you have neeed of assistance feel free to contact me.
We can work together to determine the best approach for you. Selling is only one option.
If you send me your address to me privately, I can run a few reports for you, so you can see the impact in the area.
Let me know if you'd like to discuss your options.
There are many factors that play into determining value. The asking price of a home is not necessarily the selling price and recently sales prices in certain price points have been an average of 3% over list. Some foreclosure listings are placed under market value (up to 20% below market) in attempt to attract all cash investors and multiple offers. So even though it is listed at half the value it may end up selling for much more.
Edenvale has been hit hard over the last two years. Condos/Townhomes have lost nearly 48% in value in the 95136 zip code. For homes $35-40% loss in value. There is no doubt that the value of your home has been affected by this market and the low priced townhouse for sale is only an example.
Most appraisers are looking at the last 3 months of activity within one mile of the subject home to determine value. It is always a good practice to keep track of your neighborhood and sales activity. It is always a good idea to actually view any properties that are for sale. The condition of the home and the upgrades can make a difference in value as well.
If that's the only one that sold like that, then you should find out the terms of the transaction. If the sellers had a situation where they just had to dump the property and no other home in the neighborhood is distressed then the impact will not be as big as if there were many homes selling at that value.
Remember, the resale value of your home has more than one variable:
Preparing the home for sale to hit buyer's emotional hot buttons
If you pay close attention to the other variables you could make up for pricing.
Hope that helps
The sale of any distressed property in a neighborhood is NOT going to improve your homes value.
It's important to remember that any overall "local market" is determined by the total recent real estate activity for the area. Because a home sells for half of the understood valve does not necessarily mean your home's value will suffer the same fate. It's fair to say, the overall will be negatively impacted.
Obviously the more distressed sales an area has the more adversely effected the local market will be. Let's hope this is not the "tip of the iceberg."
The Eckler Team