Sometimes banks just won’t budge. Obviously banks want to minimize their losses during a short sale, so they want top dollar. But there is a difference between a high price and a totally unrealistic price.
An “unrealistic” example: I was hired by a real estate agent to do an appraisal on a listing in Natomas. The bank wants $250,000 for this property, but there have been zero sales at that level over the past four years. I just talked about the power of trend graphs, and this graph below really “brings home the bacon” in that it helps illustrate how out-of-touch a price at $250,000 is for the neighborhood. However, if the bank was looking at sales with standard lot sizes instead of tiny lots like the subject, then I can see where they are hoping for $250,000. This underscores the importance of knowing a neighborhood market and how a glance at “comps” doesn’t always work out so well.
Should you hire an appraiser during a short sale? My advice is to negotiate with your bank first. Why spend money on an appraisal if your negotiations will work? However, if the bank is being unrealistic and will not budge on their price, it may be worth giving a local appraiser a call. You might even ask the bank if an appraisal would help. Keep in mind there is often a price difference between distressed sales and traditional sales. Additionally, the appraiser cannot be your advocate, but is instead a neutral third-party hired to render a value opinion.
I wish you the best. I know it’s not an easy process, and I do not take that lightly.
Questions: If you are an agent, are you finding banks to be in touch with the market for the most part? Any advice to give to home owners? If you are an owner, what has the short sale process been like for you?
If you have any questions or Sacramento home appraisal or property tax appeal needs, let’s connect by phone 916-595-3735, email, Twitter, subscribe to posts by email (or RSS) or “like” my page on Facebook