A short sale appraisal establishes the market value that determines what the lender will accept when a homeowner owes more than their home is worth. If you owe $800,000 and the home appraises at $700,000, my appraisal gives the bank the basis to approve a $700,000 sale instead of pursuing foreclosure.
How Short Sales Work
You owe $800,000. Home appraises at $700,000. The bank might accept a $700,000 sale (short sale) rather than foreclosure.
The appraisal is the foundation of that negotiation. My appraisal value is what the lender bases their short sale approval on.
My Role in Short Sales
I appraise the property. The appraisal establishes fair market value. Based on that value, the lender decides whether to approve a short sale.
If my appraisal is $700,000, the lender knows they can't get more than $700,000. They accept the short sale to avoid foreclosure.
If my appraisal is $650,000, the lender knows their loss is larger.
My job is accurate appraisal. The appraisal drives the short sale outcome.
Recent Examples
I've done 45 short sale appraisals in the last 90 days. Almost all came in 15-25% below what homeowners owed. That tells you how underwater the market is.
Bottom Line on Short Sales
Short sales are often better than foreclosure—for lenders and homeowners. The appraisal determines whether a short sale is economically viable.
Accurate appraisals are essential in this environment.