HOW TO DETERMINE WHICH COMPARABLE SALES YOU SHOULD USE AND WHICH TO IGNORE
The following comparable sales should not be used. Very few of these properties sell for a fair value. Here is why each of these property types is not good for comparable sales. Bank-Owned/REO Properties: Banks always sell their homes for less than they are worth. I don’t know exactly why this is. But, they do it so often that I know it’s true. The average bank-owned home in today’s market is selling for 5 percent to 10 percent less than its fair value. This is true even for homes that are in good shape. Short Sales: Buyers and their agents hate short sales, because they are tricky and unreliable. A buyer will often fall in love with a short-sale home, only to find out the banks won’t approve the short sale. Agents don’t like to show them for the same reasons. As a result, the pool of buyers for a short sale is much smaller than for a regular listing. Ugly Homes: These are homes that are unappealing and aren’t kept up. People buy homes because of emotion. Logic doesn’t always apply. As a result, a well-kept-up home will sell for more money.
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