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Contract date vs closing date

Discussion in 'Fannie Mae, Freddie Mac, USPAP' started by Lobo Fan, Oct 30, 2009.

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  1. Lobo Fan

    Lobo Fan Elite Member

    0
    Nov 28, 2004
    Professional Status:
    Certified Residential Appraiser
    State:
    New Mexico
    I am making time adjustments based upon the contract date for the first time. If I am dealing with a purchase, do I adjust to the effective date or the contract date of the subject?
     
  2. Randolph Kinney

    Randolph Kinney Elite Member
    Gold Supporting Member

    32
    Apr 7, 2005
    Professional Status:
    Certified Residential Appraiser
    State:
    California
    You adjust to the effective of the appraisal.
     
  3. Mike Kennedy

    Mike Kennedy Elite Member

    38
    Sep 28, 2003
    Professional Status:
    Certified Residential Appraiser
    State:
    New York
    Fannie
    Announcement 09-19 June 08, 2009
    06/08/09 selling guide revision/update

    Time Adjustments on the Appraisal Report
    Announcement 08-30 clarified that time adjustments may be either positive or negative.

    It also stated the adjustments must reflect the difference in market conditions between the date of sale of the comparable and the effective date of the appraisal for the subject property.

    The term “date of sale” was used in lieu of “contract date.” The correct terminology as stated in the Selling Guide is “contract date.”
     
  4. Randolph Kinney

    Randolph Kinney Elite Member
    Gold Supporting Member

    32
    Apr 7, 2005
    Professional Status:
    Certified Residential Appraiser
    State:
    California
    Is that so? Fannie will allow positive time adjustments?

    How about lenders? :icon_mrgreen:
     
  5. Mike Garrett RAA

    Mike Garrett RAA Elite Member

    9
    Jan 14, 2002
    Professional Status:
    Certified Residential Appraiser
    State:
    Colorado
    Fannie, Freddie, FHA, and VA have always allowed both positive and negative time adjustments.

    Common sense would say....adjust from the time the sales price was established, ie., date of contract to the effective date of the appraisal.

    Some lenders balk at positive time adjustments...their problem. The market is what the market is and we report the market. If the market is going up at, say, 6% per year and your comps are 3 or 4 months old than those should be time adjusted. One simple solution to the problem is using VERY current comparable sales. By doing so you may eliminate the need for a time adjustment either negative or positive.
     
  6. Howard Klahr

    Howard Klahr Senior Member

    44
    Oct 4, 2004
    Professional Status:
    Certified General Appraiser
    State:
    Florida
    Despite all of the misleading statistics related to market condition and the precision that many practitioners attempt to apply this data, keep in mind that whatever date you choose to apply, part of the verification process would include an inquiry as to any price adjustments that may have occurred subsequent to the reported contract date.

    In today's environment it is not uncommon for there to be price adjustments between the initial contract date and the ultimate closing that may not be reflected in the MLS reocrds.
     
  7. Terrel L. Shields

    Terrel L. Shields Elite Member
    Gold Supporting Member

    135
    May 2, 2002
    Professional Status:
    Certified General Appraiser
    State:
    Arkansas
    unless it is 3 plus months difference between the contract and close (i don't recall many going past 30 day..) i ain't that good. I.e.- I cannot track time changes on an hourly or daily basis. Monthly is suspect, rarely straight line, and quarterly is as precise as I believe the market will bear. It's like trying to measure wave heights with a micrometer.
     
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