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Market Value vs. Distressed Sales

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Rick Johnson

Thread Starter
Freshman Member
Jan 12, 2007
Professional Status
Licensed Appraiser
The definition of market value includes: "both buyer and seller are typically motivated...." The majority of sales and listings in my area are distressed, REO and Short Sales. Obviously these are not typically motivated sellers. The sales prices and listing prices of non-distressed properties are impacted by the competition of these distressed sales and property values are going down. How is the definition of market value squared with the use of distressed sales to determine the value of a non-distressed property? The easy answer is since there are so many distressed sales, they are typical, does this fly?

Mike Kennedy

Elite Member
Sep 28, 2003
Professional Status
Certified Residential Appraiser
New York
Depends on the SOW, Intended Use, and applicable Definition of Market Value:

for Example: use non-distressed subject - non-distressed comps ONLY.....for conventional mortgage lending

value declines, if any, for non-distressed closed comp sales indicated by comparison of N.D. earlier sales vs current sales to confirm WHETHER the volume of distressed/discounted local sales HAS impacted "full market value" sale prices OR not......and if so, by how much (in a given time frame).

$$ apples to (-)pears never mix well. "full boat" value indicators v non-distressed Subject - ONLY.
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