How can a home on my street sell at auction to a bank for $216K then be listed and sold for only $165K??
House on my street has sat empty for a few months. Homeowners couldn't afford it and moved out. It was set to go up for auction (foreclosed) on 5/29/08. It was purchased by a bank for $216,690. Then a local agent lists and sells it for $165,000!!! I don't understand?? Why is my property value being dragged down??
Jay and Carlos are correct. When the bank is the highest bidder at the auction and takes back the property, that transaction is recorded for the amount of the default mortgage (what was owed to the bank). When someone goes to anyone of the online valuation sites, such as Zillow or Cyberhomes or anyother site that provides AVMs (automated valuation models), the values or value ranges and comparables provided are skewed and inaccurate because their algorythms include ALL recorded transactions in county records. Including bank foreclosures. That is why it is best to contact a professional in the industry who can do a live search for real estate data. Unfortunately there are many "professionals" that do not fully research transactions and will choose the one's that will achieve their desired results.
The large amount of foreclosures, short sales, and bank owned properties are contributing to the "dragging down" of property values across the valley and state and with the projected number of mortgages that are due to reset this year and over the next 2 - 3 years, more foreclosures and short sales will add to depressed market values and/or prevent a market recovery or bottoming out anytime soon.
Wendy,
If the bids on the trustee's sale are too low the bank is not going to just let them go. They will "bid" on their own properties, get them and put them on the market. The $216k price is not a real representation of the market value. They are basically paying themselfs, that is why the price is showing so high.
Wendy - it probably wasn't "purchased" by a bank. What likely happened was it didn't sell at the Trustee (foreclosure) sale (most don't) and the bank with the original loan (in the amount of $216K) took it back. They then placed it on the market and it sold for 165K.
That is only one exception to the rule your home may not be comp'd to this property based on a # of reasons, it is difficult for anyone to comment till an agent did a history search for the property.
http://www.lynn911.com http://www.homes-for-sale-dallas.com
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