How is the Est. Value determined? And, does the Loan Amount in any way affect the Purchase Price that a potential buyer will be paying?
Thanks,
Adam
Our estimated values are determined using public records describing the property and comparing it to similar, nearby sales. Like a Zillow Zestimate, it is just an estimate of value and should be verified.
Loan amount is an important part of the selling price equation in foreclosures as the lenders primary goal is to recover that amount. How exactly it affect price depends a lot on the foreclosure stage. During preforeclosure you either have to pay off all loans, or convince the lender to approve a short sale. At foreclosure auction the debt is commonly discounted by the lender in the hopes of a quick sale. Once the property is bank owned it becomes less important, except for the fact the lender would love to recover the full amount they were owed.
I found that the estimate value from the foreclosureradar is 200K less than the recent transfer value in the detailed report for many properties searched.
Does Foreclosureradar extract the estimate value from the recent assessed value by the County?
If so, it shouldn’t be that much different in value.
If not, why not extracting the assessed value from the County as the estimate value for the foreclosure property because it affects the CLTV or equity a great deal.
Thanks.
You can’t use assessed value in California as a reasonable approximation for value because of Proposition 13. That law limits increases in assessed value. As such a home that has been owned for some time could have a $100k assessed value, and $1M actual value. ? Also, $200k losses from recent transfer values is pretty typical in CA right now, if by recent you mean 1-2 years ago. ? Our estimated value is based on a commercial grade AVM (automated valuation model) that uses recent sales data, and assessors data to estimate the value of the property. On average these estimates tend to run a little low in a rising market and a little high in a declining market.