Good News – Nearby Foreclosure Doesn’t Necessarily Hurt Your Home Value

Something we get asked a lot at Regional Appraisal Service is: “The house across the street was foreclosed on last week or it was a short sale, does that affect the value on my house?”

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The answer is no, because it was not an arms length transaction. That term “arms length” is the ‘all things being equal, with no extenuating circumstances’ concept in home values.

Foreclosed properties and short sales only affect your value when they become prevalent in your market or neighborhood. Now, if your area has become a ghost town, that’s different. But a single home going under, or even a couple is more normal these days than exceptional.

An appraiser will compare your home with recent “arms length” sales transactions in your area. The strength of the comparison and sales price of those homes will be the strongest factors in determining your home’s market value.

A.C. Nichols is a residential real estate appraiser in the Nashville, TN metro area.

Appraisal is Key to Maximum Home Sales Price and Lowest Marketing Time

Appraisals for homeowners, whether they intend to “for sale by owner” or list with a realtor, are one of the highest value but most under-used appraisal services. As a homeowner, your interest is the optimum value of your property. Simply stated, the optimum value is the maximum sales price in the least amount of marketing time.

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Realtors use parameters provided by the local Multiple Listing Service to establish the sales price. This creates broad ranges in value. An appraiser refines parameters both in market data research and the physical inspection of the property including a professional measurement. An appraisal will be an unbiased opinion of market value based on the real estate market. Whereas a realtor, will be biased to the owner to obtain the listing of the property.

Again: The optimum value is the maximum sales price in the least amount of marketing time.

For the relatively modest price of a homeowner’s appraisal (a few hundred dollars), the homeowner often wastes thousands in staging and selling a home based on an inaccurate estimate. Potential buyers walk away, or you under-sell your own home. Know anyone that drives 10 miles each way to save a penny on gas? The principle is the same as not getting an appraisal. Saving a few hundred can easily cost you thousands.

Don’t base your sales decision on either the optimism or skepticism of your realtor concerning the market. Get the appraisal. Your realtor will appreciate the objective input, and you’ll have the peace of mind – and, more likely, the cash in your pocket and a faster sale.

A.C. Nichols provides residential real estate appraisals in the Nashville, TN metro area.