I have been working with a buyer and prior to submitting an offer, I presented her with a detailed market analysis for each of the homes on the top of her list. Many of the sold comps for the homes she was interested in were bank owned and short sale properties that sold for less than the market value for homes in the neighborhood.
These properties can really skew the comparative market analysis (CMA) you complete for buyers or sellers. This is especially a problem when most of the homes in an area that sold over the past 3-6 months are bank owned and short sale properties. Appraisers focus on the past 6 months of sold homes in an area and recently many appraisers will only go back 3 months depending on the lender.
If my CMA's are skewed, I imagine the appraisals don't look too good either. This can be a big problem when pricing our listings correctly. Buyers may think the homes are overpriced since the bank owned property and short sale down the street sold for much less. Many sellers may receive extremely low offers as a result.
From what I understand, these properties cannot be excluded from an appraisal. Of course, the fact a property was bank owned and in bad condition has to be taken into consideration when comparing it to other homes in the area but these foreclosures can end up decreasing the market values in different areas of Colorado Springs or cause appraisals to come in too low.
For further information on available Homes in Colorado Springs contact your Colorado Springs Realtor, Patricia Beck.
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