Comparables As “Arms Length Transactions”

 

Homeowners I find will often make the often fatal mistake of using distressed sales as comparables, assuming this is allowable. What needs to be understood is that each comparable sale used must be what is referred to as an “arms-length transaction.” This would exclude sheriff sales, short sales, REOs (bank foreclosures) or sales between members of the same family. An exception would be if, say, short sales and foreclosures comprised a significant segment of a particular market. For towns, though, where short sales and foreclosures are a minority, citing them as comparables in an appeal could be grounds for a dismissal.   

From Newsworks:

What you include in an appeal can make the difference in successfully challenging property tax assessments in New Jersey.The sales prices of similar homes in a neighborhood are a key in determining whether an assessment is changed.David Wolfe, a property tax lawyer in Livingston, said it's better not to include foreclosed and short-sale properties in those comparisons.

 

 

 

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