Do you think it's appropriate for sales of REOs to be included in appraisers' valuations of other houses for sale?
By Renee Baccaro
(About to join TNG La Habra Brokers)
This is one of the questions that is asked on "The Housing Bubble" blog by the Mysterious Flying Miser to Bruce Norris. His answer: No, not at all. We buy REOs and rehab the properties into near-new condition. The cost is about $35,000. Let's say an REO is priced at $65,000. With repairs, my cost is $100,000. What would be my motivation to repair this property and improve the neighborhood if I could not sell the property for a profit? If I sell this property for $130,000, it would be double the REO price. My sales cost would be at least 10%, or $13,000. I would net $17,000 for taking on this construction project. If the appraisal came in at $113,000 or less, then I would have done all that work for nothing. The problem here is that if professionals did not use all the current sales dat...
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