The House Next Door... (Corona, CA)

[Sharyn Umaña-Angers]

I have a 1,722 SF 3/2 Single Family Home that we were renting for a number of years and now we are trying to sell. Getting comps is a bit difficult because it's a neighborhood where no two houses are exactly alike. But a fair Market Value estimate would be AT LEAST $375k or $400k. The problem is that the house next door (which is 500 SF bigger and with newer upgrades - countertops, appliances, etc.), was purchased in January at a foreclosure auction for $238k, and is now being flipped for $330k!! That house is EASILY worth at LEAST $425k if not closer to $475k.  I really have no idea why these guys are selling it at such a low price (I'm pretty sure that in this market, it would even move quickly at $400k). But the bigger problem for us is that suddenly we have a ridiculously low comp right next door that beat us on the market! Will real estate agents actually take this comp into serious consideration??? It's a joke... I'd appreciate any advice from people that have experience with this. Or suggestions of anything we can do to mitigate the situation.

Also, when a house is appraised, is it done so based SOLELY on the value of the individual property or do they take neighborhood comps into consideration as well?? 

Thanks in advance! 

[Chris Soignier]

Fair market value is typically defined as the price that unrelated seller and buyer agree upon in an arm's length transaction, esp. if it's an MLS-listed deal. When properties are underpriced, often multiple offers will bid it up to the FMV.

It's not just about $/sq. ft., though.   Often when a property goes for what seems like a cheap price, it may have underlying issues that negatively impact value - foundation, roof, plumbing, etc.    It helps to review the listing details, including the seller's disclosure if you can get it, to understand what factors might negatively impact the value.