Thanks for the pictures Todd. Actually the pictures in this foreclosure don't look as bad as some I've seen. Most foreclosures have the appliances taken out, and that is another pretty large expense potential buyers have to take in to consideration in addition to the cost of repairs. Personally, if it were $20,000 or $30,000 to get a house up to the standard, I would prefer to buy a house already at my standard. I'm not sure if the current buyer thinks the same though.
I talked to a local appraiser who said he doesn't use foreclosure sales in his appraisals. If the sales in an area are only foreclosures, I'm not sure wht he does. He must go father out to get betters comps. I'll have to ask him.
Local K... these photos were chosen simply because I felt that these particular listings were not extreme (to the bad). But you are right, these aren't as bad as others (yet other foreclosures are in better condition).
No matter the condition of any home on the market, it is the old adage... one mans trash is another's treasure.
To me a sale is a sale. There isn't really two separate markets (other than reality vs. fantasy). A foreclosed home in a neighborhood that sells will have an impact on comps... especially in this current market.
Keep in mind that I work with buyers and sellers in this market. Right now it is way more productive to work with buyers (as they have all the negotiating power and have only been emboldened since the REO properties have hit the market).
I have no problem separating the data for either a buyer or seller if they want me to (like the appraiser you wrote about apparently does), but I must give every advantage to whoever my client happens to be.
For buyers, I'll simply give them all relevant comparable sales data as a guide to determine the offering price.
For (human) sellers, I'll do the same thing so they know what to expect on offers made by buyers, but I'll also separate the data in order to show what the 'premium' price might be currently for a home that is well kept and very marketable.
Hopefully for this kind of seller... there are more buyers of like mind with you (buying with a certain standard that REO properties don't often come with).
Definitely two different mind frames... and the main reason I only like to work for one party in a transaction at this time (dual agency is possible, but more difficult in times like this... in my opinion).
As always... thanks for the comment.
Commenting by HaloScan
