Don't understand "third party sales don't count as comparables" Can someone explain, and would this differ by "area"

Asked by Toni, 95965 Sat Jun 2, 2012

or (not?) From 'Investor Caution: Beware of Heat in Distressed Housing'
CNBC Monday, 21 May 2012

"Unfortunately, third party sales don’t count as comparables, nor do the post-rehab houses that investors rent. The buyers can’t sell them post-rehab for what they paid, so the values never make it into price statistics."

Investors in California are not quite as crazed as Arizona, according to Hanson, but they are still paying 90 percent of rehabbed value; that also puts them underwater on the investment once they’ve fixed up the home.
(My position) comparable issues preventing me from considering sale as MOST are REO or in auction process if not early stages of foreclosure.

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3
Ron Thomas, Agent, Fresno, CA
Sat Jun 2, 2012
The sale of house doesn't become a STATISTIC until it is SOLD:
A million OPINIONS about the WORTH are meaningless.
When someone puts up their money; that is when it counts.

Three years ago, a lot of us would separate the distressed sales from the normal sales, to get good, valid numbers.
But we cannot do that any more; in some cases, 80% of the sales are distressed: That has become THE MARKET. It cannot be discounted nor ignored.
You can lie to yourself, and twist the statistics to suit your own purposes, make the numbers prove what you want them to prove, but that doesn't mean that other people will buy in to your reasoning.

We have created a set of policies and rules to guide us in determining the VALUE of a property. Appraisers use these rules; and if you use your statistics to prove that the Apprasiers are wrong, guess who is right?

When an Appriaser does an Appraisal, they ascertain if there were special concessions in the sale and allow for them in the numbers.

If you think you know more than these professionals; you are certainly allowed to live in your fantasy world, by yourself.
0 votes
John Souerbry, Agent, Fairfield, CA
Sat Jun 2, 2012
I disagree with the opinion stated and echo what Tim said, much of the terminology makes no sense. All sales count as comps, except for intra-family transfers, which is why I never use comps to value properties.
0 votes
Tim Moore, Agent, Kitty Hawk, NC
Sat Jun 2, 2012
Trying to get my head around what a third party sale is.
Most of the terms in that article make little to no sense to me, maybe its a California or Arizona thing.
0 votes
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