It has curb appeal, it's tastefully decorated, and clutter-free.
How could such a perfect home be compared to one without an owner to lavish similar attention to it?
If you're selling a home, it's likely you've had the above conversation running through your head.
Indeed, the unprecedented number of foreclosures on the market, as well as "distressed" properties on the verge of foreclosure, are impacting values and frustrating conventional sellers.
But experts say sellers stressed by unfair comparisons to their home may be able to turn that self-talk into a more productive conversation:
. Be a neighborhood snoop.
Sure, newspaper listings of foreclosures are a source of gossip. But smart sellers and their agents should know exactly how many homes sold in past months which were bank-owned foreclosures or "short-sales" whereby the seller's lender agrees to take sale proceeds for less than the mortgage debt, and the condition of the property sold.
Some foreclosures may be in a good condition, explains Connie Scott of RE/MAX At Home, Rolling Meadows, Il. In fact, in her area there is a wide divergence in sale prices of distressed homes, reflecting differences in condition and location.
It's part of a listing agent's job to have information on area sales, but sometimes sellers can also dig up valuable nuggets. "Let's say there is a foreclosure a block away that's up for sale and is a similar model to your home," illustrates T.J. McCarthy, Tinley Park appraiser. "You hear from a another neighbor that it had standing water in the basement because the utilities were shut off, and mold issues threaten." That could mean your dry, move-in home is worth more.
. Inform the appraiser .
When a seller accepts a purchase offer, and the buyer seeks a mortgage, his lender will order an appraisal to determine if the requested mortgage is supported by a certain value.
It's important for a seller's agent to be there when the appraiser arrives, says McCarthy, to inform him of any significant differences between the condition of the home versus distressed sales.
Owners should "prepare" their home by keeping lights on and closet doors open, McCarthy adds. He stresses that both owners and agents shouldn't follow the appraiser around or attempt to "sway" his opinion, however.
. Sort out distinctions.
Unfortunately, when many low-price, distressed sales occur, all values are adversely impacted, notes Joseph Magdziarz, president of the Appraisal Institute, a Chicago professional group.
Still, "The appraiser must consider all relevant transactions ...and then determine which of those transactions should be used in the analysis ," says Magdziarz.
One or two distressed sales, which sold quickly at a very low price might be discarded as "liquidation" sales, not really comparable, says McCarthy.
. State your case.
"The purchaser of the home has a right to receive a copy of the appraisal which he can share with all parties involved, " says Tom Meyer, president and CEO of Kislak Mortgage, Miami Lakes, Fla.
When a seller believes his home has been valued unfairly, the lending company may have a "rebuttal" process whereby other comparables can be presented for consideration, says Meyer. Moreover, adds Magdziarz, "a seller can choose to contact an appraiser to conduct their own appraisal and submit it to the lender for consideration."
Still, many agents, like Paula Miller with Coldwell Banker Premier Homes, Shepherdstown, W.Va. believe: "The seller has very little leverage."
Better to armthe appraiser with data when he inspects the property, and to complain immediately to the buyers' lender if he didn't measure the building or inspect all the property, says McCarthy. Also, if the appraiser indicates that he has never worked in your area, that's worth telling a lender, he adds.