FNMA Active Listings vs. Pending Listings

[ImDionysis]

Does anyone have any opinion on whether FNMA would prefer pending listings comparables over active listings? Seems to me, the pending listings would make better, more reliable comparables.

 

[Mr Rex]

With comps in the past 90 days within 90 feet, its almost immaterial.

 

[Tom Woolford]

If you are fortunate enough for your board to publish actual contract prices for pendings, that certainly would be more reliable than listings. Unfortunately, most MLS and Realtors consider that confidential until the deal closes. At least mine does.

 

[Riick]

If you are fortunate enough for your board to publish actual contract prices for pendings, that certainly would be more reliable than listings. Unfortunately, most MLS and Realtors consider that confidential until the deal closes. At least mine does.

You'd consider it fortunate if, when selling your house, deal with buyer A died, and new buyer B, not knowing prior price, paid more than A.
---It always depends on whose Ox is being gored.

 

[Joyce Potts]

There is no across the board easy answer. Every assignment has different market data and it's the appraiser's job to analyze that data pursuant to the definition of market value and intended use. Pick your poison and disclose it thoroughly so you leave no room for misinterpretation. Pendings are, for all intents and purposes, off the market, unless they're taking backup contracts. If the listings are required to gauge the competition then think about how that impacts your subject property if it were priced at your opinion and put on the market as of the effective date. If there are no active listings and only pendings, then there's your sign. Explain it and use pendings to show the price levels and DOM as to when they went under contract.

Too many appriasers lose their comfort zone when it becomes something different than a stable market. OR they just want to ***** about how much more work it takes for the same or lower fee.

Who's fault is that?

 

[Tom Woolford]

You'd consider it fortunate if, when selling your house, deal with buyer A died, and new buyer B, not knowing prior price, paid more than A.
---It always depends on whose Ox is being gored.

Once a contract is accepted and signed, the Ox can bellow all it wants.

 

[Richard Johnston]

I determine what is the best comparable. Having said that, generally pending sales are often better indicators of value as active listings are often listed too high and go through many price reductions before selling. The latter is a general statement. One has to interpret the data on a case by case basis.... For AMC's I put all my sales and active/pending sales in a hat and choose that way.. just joking...

 

[mark hurlock]

Does anyone have any opinion on whether FNMA would prefer pending listings comparables over active listings? Seems to me, the pending listings would make better, more reliable comparables.

I base my selection on what is most similar to the subject and relevant to the subject value, not based on what I think FNMA would prefer.

Having said that, and all other things being equal, I would select the pending sale before I would select the active.

 

[sputnam]

Mark raises a good point. One that I frequently try to get across to appraisers. Appraise the property, then explain what you did and why you did it. We shouldn't be selecting comparables based on lender guidelines. We are supposed to select the comparables that are the best indicators of the subject's value and then explain about any guidelines we were unable to comply with. Too often I see reports where the appraiser clearly selected comps just to meet U/W guidelines.

 

[incognito]

FNMA does not require the posting of listings in an appraisal report. However, certain client's do... Therefore, it is not a question of what FNMA wants, but what the client wants. To the best of my knowledge, FNMA is silent on the issue.

For Instance, Wells Fargo (RELS) states that they require presentation of "two relevant current pending sales and/or active listings to support the final opinion of value. The use of pending sales are preferred, however, active listings may be utilized when relevant pending sales are not available".

Seems like a good policy to me. At least it can be presumed that a pending sale, adjusted for a market derived SP/LP ratio, shows an action of a buyer (having made an offer), whereas an active listing (similarly adjusted) exhibits no actions of buyers whatsoever, EXCEPT that it for some reason, it has not sold yet.