Do Foreclosure and Short Sale Listings Affect My Home Value?

In a meeting with a new homeowner, last week, the question was raised, “Do the foreclosed and short sale home listings affect the value of my home?  After all, I am not distressed- I do not need to “fire sale” my home.”

It is a fair question.  There are benefits to a buyer when they buy a “regular” or what we now call an “equity” sale.  A non-distressed homeowner has often maintained the home better- both on the surface and “under the hood”, and there are more complete disclosures available to the buyer.  Bank owned and short sale transaction can be very frustrating for the buyer.  In these transaction the bank is the seller, and banks have little regard for what is fair or right for the buyer.  The average homeowner, however, is more likely to respond to a buyer’s concerns.

In fact, all things being equal, today’s buyer would absolutely prefer a regular sale.

And there’s the rub.  All things being equal.  The normal homeowner believes their home is worth MORE than a distressed sale.  So- let’s look at the numbers, shall we?

Since the beginning of this month 18 homes have entered escrow in Glendale.  Of those, 45% (8) were either bank owned (REO) or a short sale.  However, only 12% of the homes on the market are in some sort of distress.  Buyers are buying the distressed homes way more than the normal ones.

So… if you are a normal equity seller and you actually want to sell you can’t ignore the distressed listings.  You are competing with these homes and you must price accordingly.  Your home is worth more if  it is has more upgrades or is in better condition.

Here is the solemn truth.  Only 35% of the homes that come on the market will sell.  The rest will eventually give up.  Price is not the only thing that sells a home… but you can’t ignore the competition.

About Kendyl Young

2 Responses to “Do Foreclosure and Short Sale Listings Affect My Home Value?”

Read below or add a comment...

  1. Phyllis says:

    We would like to lease our 7 room 2-1/2 bath home with an entrance to die for! In Sylmar; a diamon in the rough…

    Reclaim it back when the real estate market gets better. Suggestions?

  2. Kendyl says:

    Well- I think I would need to know a lot more about your specific situation to give valuable advice. If you lease the Sylmar home, where will you go? Will the possible rent cover ALL of your costs? Beside mortgage, you also need to cover property tax, insurance and maintenance.

    If you would like to discuss your specific situation, please send me a direct email at

Leave A Comment...