Do Foreclosures Set Market Values?
NO! Foreclosures do not set the market value for surrounding homes. The value of a home is determined by the sale of silimar homes in the past six months; not a foreclosure! Click on the title of this blogg to read the rest. NW FL Home Values
I recently had a potential buyer tell me the house down the street sold for thousands less so the listing I represent should sell for a lot less. Excuse me, the house down the street was a foreclosure. Some lucky buyer made out like a bandit on a beautiful home because an investor jumped into the resell market too late to take advantage of rising prices several years ago. That does not mean the value of the home is less, it means payments were not made on the original mortgage and the lender is recooping as much of their loss as possible.
There are a few cases where a home owner has lost his/her income. (I feel sorry for those guys and do what I can as a Realtor to assist them in selling their home before foreclosure) BUT! I have found that in most cases a foreclosure is caused by a bad business decision on the part of lenders who do not fully (deliberately??) explain future payments and buyers who make a decision to take a mortgage without making sure they understood the fine print.
So, if you are wondering if your home is worth less because the one next door foreclosed, don’t loose any sleep over it.
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