Active Listings Falling Short of OOV

[mark young]

I would call the listing agents for both of the properties under contract you are using in the report and speak with each of them (call office and cell numerous times if needed). Talk to them, explain that there are similar properties that have been reported which are at the higher end of the range and the list price for the property under contract supports a value at a lower end of the range of for values of sales for similar comparables. You don't need to state exact #'s for the range you have determined, and ask why they set list price at the price they did. Also ask if they are motivated sellers, if the properties are distressed, and any other information the listing agent did not or forgot to mention in the MLS. I would do this before you jump to any conclusions about decreasing values, reconsidering adjustments, reconsidering sales, seasonal trends, etc.
I agree with J Grant that you also need to know and have sufficient data of other listing prices and DOM for similar comparables to determine a trend.

 

[240661]

lower listing values

I've run into the same situation. I don't remember any class room discussion about this because providing listings is a relatively new requirement. It was done during the time of the Real Estate crash . I remember when we used to charge extra for additional comparables. No more.
I consider my sales as the determining factor in value. That's what the guidelines claim. I won't contest that theory. Its God's law.
Its best to use listings that are above your final value. Find over priced listings.
When my listing values are below my appraised value and I get asked about it..I state that some sale prices are above the listed price and I can't determine what the sales price will be based upon the listed price.
Then I go back to God's law.

 

[ctapraser]

I've run into the same situation. I don't remember any class room discussion about this because providing listings is a relatively new requirement. It was done during the time of the Real Estate crash . I remember when we used to charge extra for additional comparables. No more.
I consider my sales as the determining factor in value. That's what the guidelines claim. I won't contest that theory. Its God's law.
Its best to use listings that are above your final value. Find over priced listings.
When my listing values are below my appraised value and I get asked about it..I state that some sale prices are above the listed price and I can't determine what the sales price will be based upon the listed price.
Then I go back to God's law.

My bold,

This is your solution???

Listings are NOT "a relatively new requirement". They are (and always have been) a sign of what the market is (as in now) doing. They should always be considered.

To tell someone to "find overpriced listings" is not the best idea!m2:
Seems like someone may not have had the best mentor when they learned how to appraise real estate?

 

[J Grant]

Appraisers need to analyze listing Activity. in addition to putting a listing on the grid. The analysis of listing activity is what counts, and provides information whether rmarket is stable, rising or declining, as well as support if subject value opinion is on the high, low, or mid range .
​

For example, subject is in a subdivision of 200 homes. 8 listings on the market, with 4 in contract under 60 dom, gives a different picture than 8 listings on the market, only 1 in contract after a steep price reduction, and Dom over 150 days on the rest. 8 listings with half of them REO is a different picture than 8 listings that are owner sales. 2 listings with both in contract in under 5 days marketing time gives yet another picture.
Adding an overpriced listing for the sake of price alone ..why choose that one, of all avail substitute listings? Not great advice imo

 

[240661]

Figuring out how much a property is worth is the easiest part of this business. Almost anyone with an 8th grafde education can do it. People buy homes everyday without any knowledge of the appraisal process. The hardest part of this business is keeping up with Fannie Mae and lender requirements that have nothing to do with appraising a property. If you need to fill out a form to determine how much a property is worth, you shouldn't be doing appraisals. Most all appraisal problems come from underwriters, not problems with appraised values.

 

[J Grant]

240661 disagree, oy veh is all I can say!

 

[Elliott]

I can 'prove' just about anything I want to with listings.
Sales have more weight, but current market conditions, ie., listings, should be considered.
Its why this job isn't dull.

 

[ctapraser]

Figuring out how much a property is worth is the easiest part of this business. Almost anyone with an 8th grafde education can do it. People buy homes everyday without any knowledge of the appraisal process. The hardest part of this business is keeping up with Fannie Mae and lender requirements that have nothing to do with appraising a property. If you need to fill out a form to determine how much a property is worth, you shouldn't be doing appraisals. Most all appraisal problems come from underwriters, not problems with appraised values.

m2:m2:

 

[Amy Perkins]

Right now volume is way way down, I crunched some numbers recently and I compared the previous six months to the current six months down 47%. The past three months compared to the previous three month period, down 53%. Few listings, many are overpriced or underpriced, and by more than 10%. Only the ones between 5%-6% above the market value are actually selling. Mortgage lending has declined 65% year over year. The agents are starting to feel the crunch now too. Note that this is per transaction comparisons, not prices. Prices are remarkably stable. We need some more lending please!!!