Appraisal Question

[Account Closed]

Appraisals use the net value of the comparison sales and are then averaged to come up with a median appraised value for the subject property. With that in mind, what if the "comparison sales" are all foreclosures?

Example:

You buy a house using a HM Loan and rehab loan with 6 months to refinance into a conventional 30 year mortgage. The cash out being 75% of the ARV. (That ARV is based on the appraisal the bank will use in securing the 30 year note.) In hopes to pay the HML and the Rheab Loan off in one lump sum.

You get the deal going in as you know the good properties around town are worth 3 times as much. That's why I prefer foreclosures versus retail (right now)

But when I do a comparison of the properties now, I see that all my comps are foreclosures. Do foreclosures count in the appraisal?