For many newer homeowners, this is the first correction they have experienced. I’ve been asked a question about short sales in an e-mail. It is a good question for both agents and appraisers to answer. It is presented as follows:
Appraisers, please chime in.
Fake Scenario: A home is sold as a short sale. It was purchased with 100% financing (1st & 2nd) just 13 mos. ago. for $990,000. The short sale is for $610,000. It has now closed.
I would like to ask appraisers what the impact is on immediate neighbors? What is the impact on comparable sales (both purchases and those who may try to refinance)? Here are some possible outcomes:
- No impact on neighboring values.
- Modest impact on neighboring values.
- Will clearly set the bar for sales in the neighborhood.
- Will show the home may have been purchased fraudulently.
Several short sale transactions our office has been involved with are homes that are only three years old or newer. This must have an impact on listings and sales in newer developments. What will this mean to existing homeowners in newer developments where short sales exist?
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Thanks and everyone enjoy the great weather! See you down at Safeco Field!