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DO real estate appraisals compare single owner homes to foreclosures when looking at price?

My house just went under contract to sell. A lot of houses that have sold in my neighborhood in the last 6 months have been foreclosures, with very low prices. Are these the comps my appraiser will be looking at, or do they have to exclude foreclosures? Most of the non-foreclosures that have sold have been priced higher than me, but are bigger. I am worried, I want out!

Public Comments

1. All sales are included. The foreclosure price is not, the price the bank paid themselves. But if the home had a buyer other then the bank the price is included as a sale.
2. Why do you want out? If the appraisal doesn't justify the sales price then the buyer won't be approved for financing. You aren't required to lower your contract price to equal the appraisal. Unfortunately banks are dumping their properties and that's creating the market. realtor.sailor
3. An appraisal is a persons opion. A good appraiser will be thurough with their findings to give you an accurate value of your home in todays market place, including all pre-forclosures, REO's, FSBO's and the common market. Gino (NapoGino) Napolitano http://ChicagoWholesaleDeals.com
4. Traditionally the appraisers did not use homes sold that were bank owned because the condition issues often were hard to adjust for. And because whatever effect those bank owned properties had on prices they would have effected the other houses that the appraiser could use also- so it just worked better. If the only house sales that are similar to yours and close to yours are "foreclosures" then they probably will use them. The rule is they have to use the most similar sales as they can-that includes mostly location but also size, age, condition, features, seller concessions, updates and more.
5. The foreclosure values are not included, but the prices that the banks sold them for after foreclosure are included. This is the exact scenario that Obama suggested in his bailout program for real estate by ebbing foreclosures that ultimately hurt the home values of the people who are paying their mortgages on time. Good luck on the sale!
6. Appraisers should be using arm's length transaction for the first 3 comparables to determine market value. Short sales and foreclosures are not arm's length transaction they are liquidation sale's. Additional comparables 4, 5 and 6 may be pending or active listings. The only time a appraiser should be using foreclosures comparables is if he is appraising a foreclosure and the lender wants a 30-60 liquidation value. There are a lot of people that post here that don't have a clue.