Yes or No? Are short sales & foreclosures relevant in comps?

[Silverfall]

Originally Posted by kevinm

I think the original poster was referring to COMPARABLES, not COMPETITION. I don't think you should have to use a forclosed or short-sale transaction to base your selling price.

You shouldn't have to, but if you want to sell you might have to...if that's all that is selling in the market place.

[novahousehunter]

It may depend upon the neighborhood, but if it is mostly foreclosures selling, then they have to be comps, don't they? All else equal (size, condition, upgrades), why would buyers view them differently based upon who owns them?

In neighborhoods that are not dominated by foreclosures, it may be possible to write off the odd few as a separate category, as long as regular sales are happening too. But in the built-in-2005 neighborhoods that are largely distress sales, that's what's setting the precedent.

[MeInDenudinFL]

Originally Posted by MelanieP

Two realtors told us no... they are not your competition because people who are looking to purchase short sales and foreclosures are generally not the same people who need to buy a house ASAP.

But it seems buyer's agents are telling their clients yes. If there is a foreclosure in your neighborhood - even if location is absolutely the only similarity between it and your house, it can be included in comps.

Realtors, which is it??

I can tell you as a buyer that's not true in our area. I looked both short sale and traditional listings while searching. My research on short sales actually help me to spot great "traditional" listings (those who undercut even the short sale listings). I see lenders' appraisers using short sales as comps. Then how do you think a buyer that ignores short sale would get financed? A cash buyer is something else..

[NYMD67]

Both short sales and forclosures ARE used as comps when putting the house on the market.
You can put your house on the market for whatever you want,but the market will decide what it will actually sell for and in today's market, if a person sees a property that is $100K less than yours because it is a forclosure, they are at least going to look at that property.
We have a house on the market right now,has been on for almost a year now and there are many,many forclosures in our neighborhood we are selling in (thank the good old banks for giving people loans for homes they coudln't really afford) and we will have to use all of those forclosures as comps to our home,regardless.

The only positive thing as a seller of a non-foreclosure is that these types of sales take a long time and your potential buyers may not want that hassel.

Good Luck,but yes,they will be used as comps and any agent that tells you otherwise I would question.