Asked by Shane Willis, Pensacola, FL • Sat Apr 16, 2011
I read the following article and it made me wonder what the real estate community thought of it
Distress sales used as comps: Right or wrong?
CHICAGO, Ill. â€“ April 6, 2011 â€“ Should residential appraisals use distress sales as comparables? Itâ€™s a thorny question and some state governments are weighing in on the issue.
A Realty Times article notes that using distress sales as comparables in a normal market is often considered inappropriate because such sales are unusual and do not represent the standard market. However, nowadays in many markets, distress sales may comprise 30 percent to 40 percent of current sales activity and are impossible to ignore.
Four states are considering laws that would affect how appraisers should consider the sale of distressed properties.
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