Foreclosures In My Neighborhood – How Do They Affect My Value?
Posted by Paul Gonzales | Leave A Comment »
Foreclosed properties and “short sales” are certainly in the news today. We are all aware that they exist in every community right now including our own neighborhoods. Properties that have been taken back by a bank or lender and held on their books are known as “real estate owned” or REOs. For both regulatory and business reasons they must work to sell them as soon as they can and get the REOs off their ledgers. So-called short sales are where the private owner and the lender agree to sell the property for less than what is owed. In our current markets, this need to liquidate properties often forces the lender to sell at a loss. As seen in recent sales figures for many areas, this practice has at least the potential to drive market prices lower in some areas.
OK – So how can the sale of a nearby foreclosure or short-sale affect me?
Any individual home sale in the area is only one statistic, not the entire local market. In fact, a common misperception is that the lowest recent home sale “sets the price” for similar properties around it. Not so. Understanding just a couple of basics about how a professional appraiser determines value can illustrate the impact that recent nearby sales have on your home’s value.
Appraisers are required to identify recent sales of properties that are similar and near in proximity to the home being appraised; these other sales are called comparable sales, or “comps“. There are extensive rules and formulas that they use to accomplish all that but those are the general criteria that they seek. After adjusting the sales prices for considerations such as age, size, amenities, quality and condition (among many other issues) the appraiser then has a finely-tuned range of prices that he or she will use to determine the value of the subject property being appraised. While not impossible, it is rare that the final value ascertained will be equal to the lowest comparable sales price (REO, short-sale or otherwise). Most commonly, the final value will be somewhere within the range of prices analyzed.
Which brings us back to the topic of the sale of a nearby REO or “short“. If the lowest sales price in the pool of comps used by the appraiser is an REO and is also significantly lower than the rest of the comps in the pool, the appraiser has the latitude to comment on that aspect. Depending upon how solid the remaining sales comps are, the REO or short-sale could have only a minimal impact on the value of the subject property. It may thus represent only the low end of the value range for that particular market. On the other hand, if the majority of recent comps happen to consist of REOs and/or short sales, then they may well define that local market and collectively have a significant impact on the value of the subject property.
In the final analysis, the value of your property is determined by your local market and is usually defined by recent multiple sales. Regardless of whether comparable sales are private sales, short sales or REOs, the market “is what it is” at that point in time. What’s most important to remember is that for the vast majority of markets, value is not defined by any one single sales transaction!
for more information contact Paul Gonzales, Countywide Mortgage Lending (760) 746-7388 or paulforloans@aol.com
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State of the Local Market
Posted by Rachel LaMar, J.D. | Leave A Comment »
There are so many statistics and opinions out there about how the market is fairing, so here is my own very basic analysis. It’s a mixture of numbers, opinions and instinct based on what I see out there in my own specific section of the market. See what you think. http://www.rachellamarrealestate.com/blog/2010/07/29/how-is-the-real-estate-market-fairing/
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Get Your House Ready for Sale, On a Budget
Posted by Rachel LaMar, J.D. | Leave A Comment »
Are you thinking of selling your home? If so, you likely know that it is important your home looks the best it can to draw potential buyers and get the best possible price. In this tough economy that isn’t always so easy…but don’t go hiring landscapers and painters just yet. Here are some economical tips you can do yourself to get your home in tip-top showing shape. http://www.rachellamarrealestate.com/blog/2010/07/25/getting-your-home-ready-for-sale-without-breaking-the-piggy-bank/
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Tune In Today At Noon To BizFit 1700 AM Radio Show
Posted by The Windermere Team | Leave A Comment »
Tune in Today at Noon to Bizfit Radio Show and click on the listen live icon to enjoy some lively conversation and interesting information when our very own Steve Rodgers joins Kory Kavenewsky, the host of Biz Fit radio talk show. Every Monday from 12-1 PM, Kory and his guests discuss the most relevant Real Estate topics concerning Southern California. Today’s show will feature Steve Rodgers, President/Owner of Windermere Exclusive Properties. Steve is always focused on the positive Windermere way!
Whether in your car, at your computer, wherever you may be… tune in to 1700 am radio today at noon!
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This Week’s Windermere Ad in San Diego Union Tribune Real Estate Section
Posted by Sherry Moore | Leave A Comment »
Check out Windermere’s Sunday July 25th Real Estate ad in the San Diego Union Tribune. Don’t miss these fantastic listings offered by the finest agents in the industry. Interested in a property? Please call the agent!
Interested in joining our Windermere Exclusive Properties team, please call any of our managers listed on this ad!
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