12 month history of LISTINGS?

[officepolicy247]

I have recently recieved a few "condition" requests for a 12 month history of "listings" of an appraised property. Since this request was not made when the report was ordered, and there appears to be no USPAP requirement (they require analysis of "current" listings and "prior" sales only), I have put such requests on the back burner. Does the rest of the industry agree with me that such requests should be made at the time the order is placed.......or am I missing something?

Douglas Kues

 

[George Hatch]

Douglas,

Love your avatar.

In reference to a lender requesting disclosures on the listing history, I think it's a perfectly reasonable request. I provide it even if they don't request it because I think it's an important piece of information. The value aspect aside, the mere fact that the borrower has recently considered selling might influence the underwriting of the loan.

George Hatch

 

[Terry Russell]

If you are speaking of the most recent consectutive 12 months,

how many could there possibly be? If there are more than four, that

may be a red flag. (You know the old arm's length transaction criteria)

I believe it would be unusual to find more than two

listings in a year. Terry

 

[Chris Harrison]

You may want to look at the URAR! "Analysis of any agreement of sale, option, or listing of the subject property" prior 1 year. The 1004 form is the minimal standard that residential appraisals are judged.
Just my .02
Chris

 

[officepolicy247]

George:

Thanks, and I agree that the request is not a bad one. What I disagree with is the fact that the lender does not make the request when the order is placed, but rather makes it a condition after the report has been submitted, thus making duplicate and extra work for all concerned.

Chris:

USPAP 2002, Standards Rule 1-5, does NOT mention "prior 1 year" in the same rule section as "listings." Not a problem, because most lenders do not recognize the distinction either, but the appraiser is only required to analyze CURRENT listings, not PRIOR listings.......only PRIOR SALES.

Douglas Kues

 

[Anonymous]

How are we supposed to know if a property has been listed with a non-MLS broker or in an MLS system which we don't have access to?

 

[Ted Martin]

If I know about it I write about it. I've found it much easier to ask the borrower / seller why the house is now worth $50k more than it was last month, and put it in the report. A few extra words in the report will save one or two days of research a couple of pages or writing a response to a review three months later when the players have changed or aren't talking to you.

 

[Tim Hicks (Texas)]

Guys, lets not mince words here. If the property has been listed within the past year, you should mention it in the report. Yes, the URAR says "current", but in all reality, don't you think it is a pertinent fact that should be disclosed in the report? If say, the property was listed for $95,000, but you appraised it for $110,000. Don't you think that would throw a red flag up under review. Now, if your comparable sales support $110,000 and you did not avoid more similar sales, then you can defend your value easily. But, if you appraised a number instead of the property, then the listing may come back to haunt you. After all, wouldn't you be suspicious if you were reviewing an appraisal on a property for $110,000 and you saw it was listed for six months or a year up until the month before the appraisal and did not sell. It is common practice in the current market for people to give up on selling their home and just re-finance because they could not sell. So, then the loan officer tells them to take it off the market and don't worry "we can get an appraisal for over $20,000 more than you listed it for." If it was really worth over $20,000 more than the list price, it would have sold in record time. Don't let one word (current) get in the way of doing a proper job of reporting. If you have nothing to hide, there is nothing to hide. My opinion, appraisers who don't want to report a previous listing are trying to cover their inflated appraisal. Cynical, yes. Review a few appraisals and you will be just as cynical.

Give them what they want and start disclosing previous listings. Or don't and get ready for heavy explaining under review.

 

[Tim Hicks (Texas)]

Walt,

Sometimes there is no way to know if the home was listed with a non-MLS broker or another MLS system or FSBO. We can not not diclose things that we do not know or can't find out. Nobody should persecute you for coming up with an obscure listing of a property. Chances are a reviewer will not know about it either. However, if you are appraising in an area, shouldn't you have access to all MLS for that area? How can you do a competent job, if you don't? I have a rule I follow on every property i appraise. Before I pull tax listings or anything else, I check for any activity on our MLS for that address for the full five years we have access to. We can search by address on our system. First, you will discover any canceled, withdrawn, expired or current listing. Plus, you can see any prior sales in the past five years. This simple rule can help you grasp the general range that this property would fall. Next, it helps you explain to a loan officer that you are not going to appraise a home listed for $150,000 for $250,000. Second, it will help keep you out of trouble, if you desire to stay out of trouble and do your job correctly.

 

[Tim Hicks (Texas)]

One last thought. The word "current" is not a loophole or appraisal loophole. Just like most other loopholes, eventually they will be erradicated and usually proven to be wrong or illegal.