Question Details

Tom, Other/Just Looking in 94088

can an appraiser use the sales of foreclosure/bank owned/ REO property as comparables in the sales Comparison Approach ? Why ? or Why Not ?

Asked by Tom, 94088 Sat Oct 2, 2010

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Hi Tom. Oh, man, we've been fighting over this question for 3 years now. I usually just walk away when someone insists that REOs/shorts, etc., cannot be used. OF COURSE they can be used, they're COMPS!! But sellers sometimes don't want to face reality and they won't accept these as comps when we list. They are most definitely comps, no matter what anybody says.

Let's go back to RE 101. Now, repeat after me class....."a home is worth what someone is willing to pay for it."

GREAT QUESTION, surprised it has not been asked here before.

GOOD LUCK.

Scott Miller, Realty Associates, Boca Raton, FL
0 votes Thank Flag Link Sat Oct 2, 2010
Not only can they, it is my understanding they are requiured to use REOs and short sales. It used to be these were considered distress sales and, thus, not valid for comparison to non-distress sales. But, the banks control the appraisal process these days and they are insisting that REOs are NOT distress sales, (Bank of America and Wells Fargo both participated in a seminar recently where they declared REOs and Short Sales NOT to be distress sales and stated they expected to receive full market value for these properties).
0 votes Thank Flag Link Sat Oct 2, 2010
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