Will a nearby short sale be factored into the appraisal value of my house on Long Island?

Asked by Westl, Elizaville, NY Sat Jul 23, 2011

I've heard that most appraisers won't use short sale data as a comparable but I've heard that sometimes they do, it depends on the lender. Which is correct? I'm selling my home and a house nearby sold as a short sale for almost 30% off what the average selling price is and I'm nervous about the upcoming appraisal.

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Annette Levinson’s answer
Annette Levi…, , New York, NY
Sat Jul 23, 2011
If the short sale house was within 1 mile of your home and the same school district, the appraiser is obligated to consider the property in their appraisal. If the short sale house is not the same style or has different amount of bedrooms, baths or square footage, the appraiser will use if there or not 3 other houses that sold in the last 6 months that were closer in description to your home.
1 vote
Javier Menes…, Mortgage Broker Or Lender, Melville, NY
Sun Jul 24, 2011
Appraisers are required by USPAP (Uniform Standards of Professional Appraisal Practice) to ignore distressed sales, which are sales that occurred under distressed situations, like divorce forcing a quick sale, foreclosure/short sale. But if there's multiple sales like this, to the point where a good portion of the sales and inventory in the area are short sales or foreclosures, it'll have a huge impact on your home's value.

What amount of the homes for sale are shor sales or foreclosures? What is the price range for the homes that aren't?
0 votes
Ron Thomas, Agent, Fresno, CA
Sun Jul 24, 2011
The Appraisal should have an allowance for the SPECIAL CONDIITIONS of the Foreclosed Comp.
0 votes
Ruth and Per…, Agent, Los Gatos, CA
Sun Jul 24, 2011
Hello Westl,

Right that can be tough when there is a 30% decline.
While an appraiser is required to look at like and similar properties
A 30% delta can be a red flag requiring the appraiser to look at the
Deal more closely and deem whether the property is in a declining market.

Good luck.

0 votes
Anna M Brocco, Agent, Williston Park, NY
Sun Jul 24, 2011
The appraisal will be based on recently sold similar properties in the immediate area....
0 votes
Arlynn B. Pa…, Agent, Roslyn Heights, NY
Sat Jul 23, 2011
An appraiser will use the 3 most comparable homes (# bedrooms, # baths, style of home, size of property, total interior square footage) that are closest to yours that have sold in the past 6 months. If the short sale home falls within these parameters, then it will be used in the appraisal. If you have any further questions, please contact me.

Arlynn B. Palmer, ESQ, SRES, CBR, CMS, CNS
Coldwell Banker Claire Sobel
(516) 410-3594
(516)621-6300 x 205
Web Reference:  http://www.ArlynnPalmer.com
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