Does a foreclosure sale in your neighborhood affect your homes value when selling?


Still one of the biggest obstacles home owners have when selling their home in the Novi real estate market and the Metro Detroit area is the home appraising for the purchase price. When I meet with home owners I provide to them a CMA (comparable market analysis). In this report I provide to home owners recent and comparable homes that have sold in the past 180 days. A question I am often asked is “Do foreclosures affect my home’s value?” The answer is “Maybe”. Once an offer is accepted on your home a mortgage company will order an appraisal on your home by an appraisal management company which in turn, will send out an appraiser to complete their appraisal. Many home owners do not know that approximately three years ago lenders no longer have direct contact with the appraisers and the third-party, or management company is the middle man to insure that there is no “favors” or “special treatment” given to the party ordering the appraisal. When appraisers go out to perform their analysis of the subject home and recent home sales in the subject market place, they look first to see if there are other homes that were sold by private home owners and not bank owned sales or foreclosures. Understanding that banks are still selling homes sometimes below the average market value, appraisers try to find comparable home sales by private owners first. Only if there are no private home sales or not enough private homes sales, then will the appraisers then search for bank owned or foreclosure sales. So it is important when preparing to sell your home, your Realtor provides a very in-depth market analysis for you and explains all of the homes sales including bank owned/foreclosures and make you aware of all the homes that have recently sold and the possibility of if a foreclosure could be used in an appraisal for your home.

Advertisements

Leave a comment

Filed under Uncategorized

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s