FORECLOSURES AND SHORT SALES- EFFECTS ON RESALE VALUES

[Myhearts]

Hey All,

Hearts here.  Quick question.  Got a neighbor with a beautiful home that is now in foreclosure.  Home is: 4bd, 2-1/2 baths, fireplace, family room, lr/dr, full walkout basement.  Size is: 3200 sq. feet.  Home has been on the market for 321 days.  My house is similar with exception of fireplace and is 2600 sq. ft.  My home was recently appraised (6months ago, if that's recent) for $345K.  She has the biggest model in our subdivision and was last appraised at $370k.  She has dropped the selling price 3 times and now has her home listed at $299K.  How is this going to effect us when we try to sell our homes if she sells hers at that amount?

Hearts

[ShanetheMortgageMan]

It depends on if there has been a lot of distressed sales in your neighborhood.  If this is the only one, and all of the other recent sales are in the $350-370k range, then your value should hold up.  If there aren't many sales, or have been quite a few distressed sales, might bring your value down to the $260-280k range.  Do you still keep in touch with your real estate agent?  If so ask them to email you all of the sales in your neighborhood over the past 6 months plus the current listings, so you can get a feel of what your home's value likely is.

[Myhearts]

Yes, I do keep in touch with her.  I will ask for that list. 

Thanks, Shane.

Evelyn

[Anonymous]

Hearts- I just wanted to respond from a buyers perspective.  We just bought in a modest, well-maintained, cozy, neighborhood.  When we studied the comps, 2 houses sold CONSIDERABLY lower (our house 130,000, these two houses well under 100,000).  However, most of the comps had sold for a bit higher than our house (by about 10,000).  I was more focused on the houses with the higher sales prices.  If there were more of the low prices, I would have been concerned, but not since there were only two.  Does that make sense?

-iwannahouse

[Myhearts]

Iwannahouse,

Yes, that makes a lot of sense. 

Thank you

Hearts