We would be lying if we told you a neighborhood foreclosure or short sale has no effect on your home’s value. In contrast, we're going to tell you not to worry about it, too much. We are lucky to live where we do – lenders, appraisers and Realtors® took very good care of our communities in the “gold rush of real estate”, relying on strict lending practices, moderate inflation of home values and common sense.
What really decides the value of your home? The quick and easy answer is “what a buyer is willing to pay for it.” That answer would make our jobs as Realtors® far easier, but realistically when an appraisal is completed, that is what the bank sees as the value of your home. This is where short sales or foreclosures typically affect your value.
In our area, there are relatively low rates of foreclosures and short sales, which keeps our market values stable. Most appraisers work hard to find comparable sales at market value, meaning that the sellers were not under distress. Unfortunately, sometimes there are so few (or no) recent sales in an area that a foreclosure or short sale has to be used. Most appraisers who use a foreclosure make sure they explain that: it is a foreclosure, it is not a good comparable and it isn’t given a lot of weight.
When we list a home and there are foreclosures or short sales nearby, we are up-front with our sellers and we discuss it. It sometimes comes into play when pricing a home to sell, as much as we wish it did not.
The best advice we can give you to protect yourself and your neighborhood is to keep building equity in your home – it is the best safety net. Be vigilant about paying off home equity loans and home equity lines of credit, and keeping current on your mortgage.
Kristi Hardy
Director, Marketing Services
Park Co. Realtors
701.237.5031
www.ParkCompany.com
www.Facebook.com/ParkCoRealtors
hm..if i will sell my home i will do this with you!
Posted by: online writing | May 06, 2011 at 09:06 AM