Affidavits of Value and Bank Owned Homes

Page eight of the Arizona Association of REALTORS’ Residential Resale Purchase Contract is a bit of a mish-mash of fine print. There are 16 separate sub-sections of the contract’s eighth section dealing with everything from risk of loss due to an “act of God” to the fact that days begin at midnight to what form the earnest deposit will take.

In this midst of all this is one line that often gets overlooked:

8c. 340. Permission: Buyer and Seller grant Broker(s) permission to advise the public of this Contract

Contrary to popular belief, this doesn’t involve the agents involved emoting like they just won an Oscar, shouting (and e-mailing) for all to hear that they finally sold a house. What it does involve is the Affidavit of Value, which is filed with the County Recorder.

While some continue to labor under the misconception that the appraisal is the true measure of a house’s value, what counts as far as the county is concerned (and what then is used to determine property taxes) is the actual market value – the sales price as had been agreed to be a willing buyer and willing seller.

There’s one notable exception to the requirement of an Affidavit of Value being filed – a home that is the subject of an unsuccessful trustee’s sale. The trustee’s sale is the final step in the foreclosure process – the home is sold to the highest bidder on the courthouse steps and that bidder then assumes responsibility for any liens against the property.

If there is no bidder, or the highest bid isn’t sufficient to meet the minimum needed bid to cover all expenses on the home, the house reverts to the bank.

These homes reflect on many websites – including some of the major online search portals – as recorded sales for the value of the mortgage owed on the property, which often has nothing whatsoever to do with the current value of the home. (A common question from those searching these portals for homes is how a home could have sold for hundreds of thousands above its current value just a month earlier – this is why.)

It’s yet another example of the wealth of data being available not meaning that all of the data is valid; you’ll want a second set of eyes double-checking what you’re seeing to make sure what you think you see is what really exists.

(Editor’s note:  This was but one nugget gleaned from yesterday’s day-long Short Sale and Foreclosure Resouce certification course I attended; more to follow.)

[tags]Phoenix real estate[/tags]

Jonathan Dalton

Jonathan Dalton is a 40-plus-year resident of the Valley and has been helping folks buy and sell homes since 2004. He can be reached at 602-502-9693 or info at

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