Earlier this week I posted “Will This Affect the Resale Value of My Home” looking at the issue with power lines and water towers as possible issues with the resale value of your home. Today I’m going to look at a serious issue in many Northern Virginia neighborhoods, foreclosures and how they may affect the value of your home.
Foreclosures vary from community to community. In some areas you might not be able to tell a home is in foreclosure from any other for sale in the neighborhood. In others you may find signs that announce the property is a foreclosure or see homes that who obvious signs of neglect. So how do you know whether a foreclosure in your neighborhood is affecting the value of your property? One of the key components of determine the value of your home when it is being sold is a professional appraisal. In a neighborhood where foreclosures are few and far between the chances are an appraiser will not need to use a property that has sold as a foreclosure as a comparable property and there won’t be any issue. However in a neighborhood where there have been a signicant number of foreclosures, appraisers have to include those sales in their comps. Most appraisers will try and discount the value of a foreclosure property but where they are a majority of the sales in the neighborhood then they will affect the value of your home.
If you live in one of the areas where there are a large amount of foreclosures you can expect to see a slight drop in your value. It may not always be about lower prices but also about buyer’s feelings about the area. If they perceive the area is showing signs of neglect they will automatically discount the value of your property even if it is in top shape and you will need to make a tough decision about pricing your home to reflect an issue you have no control over.
A secondary affect of foreclosures in areas with HOA and condo associations is the impact of the uncollected dues and fees on current homeowners. Usually before a property goes into foreclosure the owners stop paying their monthly HOA or condo assessments. Over time depending on the number of unit in distress the association’s budgets can take a hit and current owners may end up being tasked with making up the shortfall. As a result association fees rise and that increase in fees may make a property less desirable to a future buyer. Condo buildings are at the highest risk for lower values due to foreclosures as they are often the only comps an appraiser can use.
Foreclosures can affect the value of your home and you need to be aware of what is going on in your neighborhood. A professional Realtor® is the best source of information on how many foreclosures are currently in your neighborhood, how many have sold and current strategies for getting your home SOLD in today’s market.
More information on Northern Virginia Foreclosures