REO sales and "Market Value"

[residentialguy]

Yes, the REO home is vacant and there is no seller disclosure involved but if the property is in good condition, the assuming risk can be easily offset by the buyer hiring a qualified, insured home inspector. the seller disclosure statement covers only items that seller in the best of his knowledge knows and if there is something hidden that seller can claim that he didn't know about it, there is not much the buyer can do about it. For that reason, there is a common practice now to hire a qualified home inspector and don't rely much on seller or agent disclosure statement.

You keep trying to persuade that they are equal...yet the market doesn't see it that way. If you have a 2 tiered market in price, it proves you wrong

 

[JSmith43]

JSmith, since you are so invested in proving yourself "right", (or proving me wrong) find the older definitions and post them!

I don't have to look it up for readers to know I am most probably right & you are most probably wrong.:icon_lol:

I can come close enough by memory, since I remember the buzz about introducing the term "most probable" back then.

It was something like the highest price estimated in terms of money which a property will bring if exposed for sale on the open market......and then other hypothetical conditions were added. It really read quite closely to the current definition unless some bone head glommed onto one part of the definition such as the words "highest price" and ignored the conditions that follow.

No surprise that there are appraisers that glom onto the term "most probable" and ignore the requisite conditions that follow in the current definition.

 

[residentialguy]

Rand,

Colfax was not a market value sale. As I said before, I'm not going to do more digging - it ridiculous and I'm not going to waste any more time with you on this. I proved that there is definitely neighborhoods here where your comps will all be distressed. You're making a fool of yourself.

 

[moh malekpour]

You keep trying to persuade that they are equal...yet the market doesn't see it that way. If you have a 2 tiered market in price, it proves you wrong

This is not about the market, this is about expecting a discount on price for the risk assumption. If you want to pay less because there is no seller disclosure about the possible defect, you may risk of losing money but you always can hire a home inspector to certify if there is any defect or not and if the inspector goofed, you have his insurance to cover it. If you found out that there is no defect, then there is no risk on that issue and if there is no risk, there is no reason to worry and if there is no reason to worry, there is no reason to expect less based on that issue. This works not only for REO sale, it works for any other sale.

 

[Randolph Kinney]

Rand,

Colfax was not a market value sale. As I said before, I'm not going to do more digging - it ridiculous and I'm not going to waste any more time with you on this. I proved that there is definitely neighborhoods here where your comps will all be distressed. You're making a fool of yourself.

No, the fool is you.

You presented 29 REO sales out of 40 and made the bogus claim that virtually all sales were REO sales.

Your presented 5 supposedly investor flip sales. And then you proceed to discount them as if the sales don't reflect what is going on in your market.

The argument is not which sale is a market value sale. The argument is whether virtually all sales are REO sales. The argument is whether your typical sale represent the market.

 

[JSmith43]

I think it would be hilarious to see jgrant and RK get into a spat.

 

[residentialguy]

LOL...ok, not just REOs but Short Sales and a few Flips from REO purchases.

When I said REOs it included Shorts and other similar distressed sales and manbe some investor flips. IOW no traditional sales are available. Thanks.

 

[J Grant]

JSmith, glad we are keeping you entertained!

You keep trying to persuade that they are equal...yet the market doesn't see it that way. If you have a 2 tiered market in price, it proves you wrong

The market may not see REO and non REO's sale homes as equal if they are selling at two price tiers, but, in terms of marketability, they can be seen as equally desireable.

Price paid is one test of marketability. Days on market ,and the cash people are willing to put down and then invest in fixing up is another aspect of marketablity .

Take two equivalent simlar homes, house A and B . House A is a traditional sale in average well maintained condition but no significant upgrades. House B is an REO sale, with minor cosmetic and deferred maintenance, and sells for 80k. House A sells for 100k. Was houseB less desireable? It sold in 30 days with a backup offer. HouseA took 120 days to sell ( we know REO's often in much shorter marketing times )

House A, sold for 100k FHA with 3% down. The buyer has a grand total of $3000 invested. REO house B sold for all cash. That buyer has $80,000 invested. How much did buyer B desire the home, to put up 8k0, versus buyer A fwho put p 3k? Buyer B is likely to spend 10 or 20 k improving the REO house and upgrading it. That might mean he'll ultimately put close to 100k in, all cash...so the houses become more equal after all...

I am seeing some positive signs coming from all the pain that waves of REO sales have caused. There are entire neighborhoods here that had large amounts of defaults, with a number of the homes bought as REO's, renovated and then resold...I did an appraisal in such a neighborhood last week and it was much nicer looking than a year ago, better cars in the driveway, more families living there, homes fixed up, etc.

 

[Randolph Kinney]

LOL...ok, not just REOs but Short Sales and a few Flips from REO purchases.

When I said REOs it included Shorts and other similar distressed sales and manbe some investor flips. IOW no traditional sales are available. Thanks.

You left out bunch of data from your posting in your post 232. You only posted 40 sales in the last 12 months. According to Zilow (not noted to be a complete source for MLS data), there are 93 sales in the JORDAN neighborhood in the last 12 months.

Also, you chose not to present any current listings in the JORDAN neighborhood.

According to Zillow, there are 67 listings.

You don't present a complete picture but you choose to make bogus claims.

 

[residentialguy]

That's nice...we went over the neighborhood already. A city defined neighborhood doesn't mean the whole area is considered the subject's neighborhood.