Disposition Value Form

[Ken B]

How many people actually buy and sell residential real estate because they don't have anything else better to do?

 

[Meandering]

How many people actually buy and sell residential real estate because they don't have anything else better to do?

Are you counting realtors in this?

 

[residentialguy]

LOL...no, Marion. But anytime that a person says that a sale with all of the negative things that are attached with REOs and say that buyers would buy that house as easily as they would buy a owner occupied house without all of that luggage and unknowns...they are usually fibbing just a bit...or the market is so saturated with REOs that a non-distressed sale is a rarity....or the buyers are dumb as door nails. And when investors are buying them, guess what? They aren't buying at market value prices. They are buying them to make a profit by selling them at market value.

 

[residentialguy]

The App[raisal Institute, Fanni and FHA have all come out with statements that REO sales may be used when doing so lead to credible assignment results.

As did I.

 

[J Grant]

The buyers are dumb as nails? Really? A buyer who buys the SAME house for 340k as an REO is "dumber" than the buyer who pays 280k, simply because it is not an REO?

There is no "luggage" attached to an REO sale. An REO property sells, closes, the buyer takes title and possession. If there is luggage, aka special circumstances around an REO sale, one would tend not to use it as a comp. REO sales are often snapped up faster than non REO , because the buyers are not dumb and recognize their potential. In some market areas they sell for equivalent , in some for a small discount and in others a larger discount. Whether to use an REO sale as a comp is assignment specific, just as deciding on any other sale as a comp is.

 

[J Grant]

Sometimes it is found investors re sell upgraded former REO's above "market value". Which points out the problem with making sweeping generalizations about market value....REO's sell below market value, Resales of REO's sell at market value, and the like..

WE DON'T KNOW WHAT MARKET VALUE IS FOR SUBJECT UNTIL WE DO THE APPRAISAL. Those who start out with pre conceived ideas about what sales type and what activity is "market value" and what is "below", are going to choose, and exclude comps based on their pre conceived idea and that will influence value opinion and other conclusions.

 

[residentialguy]

JG, you're just making yourself look silly(er) with the last two posts

 

[Mr Rex]

I'd question the RealtyTrac numbers for the lack of sophistication of terminology in the use of "foreclosure home". To me a "foreclosure home" is a "Courthouse steps" sale. REOs are not foreclosure homes, they are REO. Many courthouse sales are for the outstanding mortgage amount which may be pennies on the dollar of market value or of value when sold as REO.

 

[Ken B]

Because most people pay the same for a property that is occupied, staged, with chocolate chip cookies fresh out of the oven as they would pay for a cold, dark, vacant house with missing appliances and ceiling fans, scuffed up walls, ragged carpet, a broken toilet, and dead flowers...

 

[Ken B]

Anybody ever heard of a thing called "most probable purchaser?"