The value of any house is what you can sell it for - regardless of what the realtor, Zillow, or an appraiser says, because all 3 are using inaccurate/unacceptable comps.
In a normal situation, looking at the price of surrounding homes is a good guide, but if the surrounding homes are all short sales or foreclosures, that skews the pricing way down - and ruins the market for all.
If you're 40% extra is based on having a superior home or property, buyers will notice that, and bid accordingly, but know that if they can save 40% by buying the house down the street in a short sale, you may have trouble getting them to even look.
For me, I've looked at short sales and foreclosures, and they are rarely as good a deal as they seem on paper. Very often they have not been cared for, frequently vandalized, and the banks are most often taking a" take it or leave it" attitude, even when large issues are in play, and dragging their feet to boot, so it takes forever. Sometimes these home require cash to buy them, as well, so no loans will cut out a lot of buyers. (Not to mention sometimes the "owner" is still occupying the home, and will not leave, and it becomes your problem to get them out.)
For these reasons, "I" am willing to pay more for a regular home, being sold voluntarily, to spare myself the aggravation and repairs.
Now, 40% more seems like a lot, so you better have one heck of a house compared to others - even short sales. If you do, take a shot. If you don't, then you need to ask yourself if you really need to sell, or not.