The Irony of Short Sale Appraisals

I’ve been very lucky in my career and nothing is luckier than having escaped the experience of listing a short sale. Until now. I have a listing that is a short sale in a very nice townhouse community in our area. There are units in this development that in 2009 were going for $240,000. Due to many homeowners having to undergo short sales, the last settled home, just a bit smaller than the home I have for sale, went for $100,000. The seller of the unit I have listed, bought her home for more than we listed it for sale.

I have an agreement in on this home and the buyer and seller have agreed on a fair price. We are awaiting approval from the lender as to whether or not we will go to settlement. As part of this process, the bank orders an appraisal. As part of my job, I meet the short sale appraisal and I give he/she recent sales in the area to show that we have indeed gotten a very good price, considering how low recent sales are. Recent sales that have driven the market down in this lovely community have almost exclusively been short sales. In handing the comparable sales to the appraiser, she says an odd thing.

“We can’t use short sales when appraising this home”.

What?

If not for the past two years of short sales driving the prices down in this neighborhood, my seller would not be in a short sale position.

Does anyone else see the irony of this statement? “We can’t use short sales when appraising this home”.

With only one home sold recently being the exception, there is nothing but short sales.

Ironic, isn’t it?

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