1800 Baines, a property with the same square footage, is bank owned. Chase took it back in May of this year. While they took it back at $329,000, that does not mean that they'll put it on the market for well below current market value as doing so can hurt the bank down the road if they take back another house in that neighborhood. If they dilute values in the neighborhood by selling too cheap, they not only hurt the community, but also their own chance to sell other homes at or near fair market value. Obviously, the market value of a bank owned property is already somewhat discounted just because it's an REO. The other reason why they at least try initially to get fair market value is because many owners who lost their homes to foreclosure are still responsible for the junior loans they took out after they purchased as the foreclosure by the first only wipes out the junior lenders' security interest, but it does not eliminate the underlying loan. When the first takes the property back and sells it for more than what was owed to the first (loan plus cost of foreclosure), the difference of the sales proceeds and what was owed to the first should be paid to the holder of the junior note, which will then reduce the liability of the borrower. I hope this explains why comparable sales data are relevant even if the bank took the property for less than what comparable properties are going for in that neighborhood.
Ferdig Real Estate Solutions