Following the purchase of a property, whether it is your home or an investment, an owner would like to believe that the property will increase in value over time. The past few years have shown quite the opposite trend and most Nevadan’s are aware of the decrease in the value of their home or investment property. This is far from surprising, considering it is nearly impossible to miss the foreclosure signs all across the valley. It’s just as hard to miss the newspaper, radio and TV news that report the sad state of our economy and fallen real estate prices. Still, many borrowers do not realize how much value their property has lost. How can a borrower know the reality when many are given false hope due to inaccurate home value websites and other unrealistic assessed values?
Nearly every day we meet with a borrower who believes his or her house is worth tens of thousands of dollars more than it truly is. It is not that the homeowner is uninformed, but rather, they are being improperly informed. For instance, a local realtor recently advised that her client had researched the value of their home on the web and the client believed their property should be listed for approximately $145,000. However, upon receiving comparables for the community the realtor noted that the home could not be listed for that price but rather should be listed closer to $135,000. That same home, one month later, still received no activity at $135,000 and is now listed at $129,000. This situation is not uncommon.
In order to avoid the inflated home value predicament, borrowers should contact a realtor and ask them to provide the borrower with “comps.” This information will afford a borrower the opportunity to review an appropriate approximation of the true value. In real estate, a true value can only be reflected by what the market can bear.
Carlos L. McDade, Esq.
Kelle L. Kuebler, Attorney*
*Licensed only in New York and Connecticut