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Foreclosed Sales Price = Market Value

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masmia

Thread Starter
Sophomore Member
Joined
Oct 16, 2007
Professional Status
Certified General Appraiser
State
Florida
I knew it would happen sooner or later and was curious to know excactly when and how this occurred. My father did a Miami condo unit recently. The only recent closed sales were foreclosures and the only pending sales were foreclosure sales. There were more than 20 listed for higher prices but the only ones selling are the forclosures. The units in question essentially lost half its value in the last few months. I'm still in shock. Does anybody disagree with this conclusion?
 

ccooper

Junior Member
Joined
Mar 9, 2002
Professional Status
Certified General Appraiser
State
Missouri
If you owned one today, how much could you sell it for? That's your answer.
 

Doug Meyer

Senior Member
Joined
Sep 13, 2003
Professional Status
Certified Residential Appraiser
State
Indiana
Unfortunately, most buyers are not informed and definitely not well advised.
 

CANative

Elite Member
Joined
Jun 18, 2003
Professional Status
Retired Appraiser
State
California
I agree with your father's conclusions.

A snippet from a report I did last week in a PUD that is crash diving..

There are numerous REO (bank owned) properties on the market in the Hidden Valley Lake development. Almost all closed sales during the previous three months of modest, older homes have been foreclosures and short sales. Although precise numbers or statistics of REO properties is very difficult to estimate, it appears that as many as half of the current listings of homes similar to the subject are bank owned foreclosures. With the exception of comparable sale 4, all of the closed sales and active listings in this report are banked owned, REO sales.
 

Doug Meyer

Senior Member
Joined
Sep 13, 2003
Professional Status
Certified Residential Appraiser
State
Indiana
Market value is defined as what a broker and lender thinks it should be worth after adding all their fees, closings costs and kick backs to Realtors and a fee to the straw buyer to induce them to close this transaction. Now Pam, what is the problem? :laugh:
 

Michael Samson

Freshman Member
Joined
Apr 30, 2002
Professional Status
Licensed Appraiser
State
California
Bank Sales

I had my first run in with comps that were listed as sales, but when I went to take the Pics there were forclosure signs all over the place.

I use NDC and did not notice right away that the seller was an institution. I then looked for regular market sales, found 5 and completed the appraisal.

I get work from a General appraiser. He told me that forclosure sales were not reflective of the market. Well I don't know. To be reflective of the market do they need to be regular arms length sales or does the market reflect the forclosure sales also?
 
Joined
Jan 13, 2002
Professional Status
Retired Appraiser
State
Florida
Michael, please read the Definition of Market Value on the Fannie forms you are using.

Why would a 'typical buyer' pay more if they can get a very similar property for less? If there are listings of similar properties available for less, those MUST be considered in the Market Value of the subject! Doesn't matter if they are forclosures when foreclosures are no longer a very rare commodity.
 
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