Will a short sale impact the sale-ability of my house?

Will a local short sale have an impact on the sale-ability of my house? I was asked this question recently by a prospective client.

There is no absolute answer to this question. The bottom line is the sale price of any house is determined when the buyer and seller reach an agreement. Once that transaction is made that price now becomes an active comparable for 60 - 90 days after contract date.

Some agents argue that a short sale has a third party (the bank) in the equation. The bank has different motivation than the homeowner, thus these sales should not be considered as comps. 

There is also argument that banks price their short sales by securing BPO's Broker Price Opinions and that these opinions are made with active comps with possible short sales included to determine market price and adjustments made to account for money owed and property condition.

When pricing a property I must look not only at active and closed short sale contract price but the number of short sells in the area. If there are only a limited number and I have many active two party comps with higher contract prices we might exclude these sales. 

Property condition, number of short sales and foreclosures (REO's), and 2 party active comps all have to be considered when determining marketability. Other factors to consider is the sellers motivation and time frame that the house needs to be sold by.

We must also remember that if we secure a higher selling price from a buyer that is using bank financing we could have problems making it through the appraisal process.