Excerpts From FNMA Selling Guide In Reference To Comparable Sales The following are excerts from FNMA Selling Guide in reference to comparable sales. It appears FNMA recognizes a pending sale as a sale. Section 406.03 - Sales Comparison Approach The sales comparison approach to value--traditionally referred to as the market data approach--is an analysis of comparable sales, contract offerings, and current listings of properties that are the most comparable to the subject property. However, we require the appraiser to report only the comparable sales in the appraisal report. The appraiser's analysis of a property must take into consideration all factors that have an impact on value, recognizing that a well-informed or well-advised purchaser will pay no more for a property than the price he or she would pay for a similar property of equal desirability and utility if it were purchased without undue delay. To accomplish this, the appraiser must analyze the closed or settled sales, the [highlight]contract sales[/highlight], and the current listings of properties that are the most comparable to the subject property. This is particularly important in soft or declining markets because the competing current listings and contracts probably reflect the upper-end of value for the subject property as of the effective date of the appraisal, and we expect appraisers to accurately report and reflect market conditions as of that date. A. Selecting the comparables. The appraiser must report a minimum of three comparable sales as part of the sales comparison approach. The appraiser may submit more than three comparable sales to support his or her estimate of market value, as long as at least three are [highlight]actual settled or closed sales[/highlight]. Generally, the appraiser should use comparable sales that have been settled or closed within the last 12 months. However, the appraiser may use older comparable sales as additional supporting data if he or she believes that it is appropriate. The appraiser must comment on the reasons for using any comparable sales that are more than six months old. In addition, the appraiser may use the subject property as a fourth comparable sale or as supporting data if the property previously was sold (and closed or settled). If the appraiser believes that it is appropriate, he or she also may use contract offerings and current listings as supporting data. 4. Date of sale/time adjustment. [highlight]We will accept more than three comparable sales as part of the appraisal report, but at least three of them must be actual settled or closed sales.[/highlight] The appraiser should provide the date of the sales contract and the settlement or closing date for each comparable sale. Unless the appraiser believes that the exact date is necessary to understand the adjustments, only the month and year of the sale need to be reported. If the appraiser does not report both the contract date and the settlement or closing date, he or she must identify the reported sale date as either the "contract date" or the "settlement or closing date." If the appraiser reports the contract date only, he or she must state whether the contract resulted in a settlement or a closing. I believe a pending sale is also an important indicator of market activity and should be considered a sale as it is a "meeting of the minds" between a buyer and seller. When a purchase contract is reported as pending it is usually after the attorney review period and once any repair requests are negotiated the sale will most likely close. The pending sale is rarely considered available for purchase by buyer's agents and the sellers are typically satisfied with the terms of the existing contract. I consider a pending sale as an absorbed listing and also a much welcomed and relevant indicator of value.