Selling a Home? Nearby Foreclosures Can Affect the Selling Price
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One of the main issues with the economy right now is the fact that the housing market is having so much trouble. And if you are trying to sell your house, you probably know this. Increased foreclosures in the area probably aren’t helping, either. Unfortunately, it is a sad fact that few neighborhoods are unaffected by the foreclosure crisis. Tamsen Butler, over at the Personal Finance Advice blog, points this out about how foreclosure can affect the market value of your home:
Even if you have maintained your home well and have made improvements, a foreclosure which results in a home eventually being sold for less than it is worth can drag down the market values of all the comparable homes within the area. If a home similar to yours with regards to square footage and other factors is sold for less than it is actually worth then your home’s value may start to creep down as well. This means you may not be able to sell your home for the amount you think it is actually worth.
Foreclosures aren’t the only problem: Buyer approval is down
Another issue that many sellers are facing (the family across the street in my neighborhood knows all about this) is that potential buyers can’t seem to get the approval they need to get a home mortgage loan. Some sellers have been on the verge of a deal, only to find that their prospective buyers have been turned down for mortgage financing. In some cases, this happens more than once to sellers.
It’s a tough market out there for sellers. The current glut of homes means that buyers have the upper hand, and the fact that mortgage lenders are being extra picky about who they approve is also playing a role. If you don’t have to move, it might be best to stay put for a little while longer.
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February 26th, 2009 at 11:09 am
[…] It is also worth noting that there are refinancing options for those who are not faced with foreclosure. This plan makes it possible for me to refinance my home to a lower rate, even though I am not having anything near like foreclosure trouble. Additionally, preventing foreclosures can help current homeowners maintain their home values. Remember: A foreclosure in your neighborhood doesn’t just affect the “loser”; it affects your home value and your potential selling price as well. […]