Adjustment for Days on Market

[Mike Millson]

I'm being asked to adjust for days on the market on a listing(comp 4) I provided. I've never come across this before???? It is slightly past(225 days) the typical market time(3-6months) in the neighborhood. What say the experts???

 

[bart nathan]

225 might be the total days but how many days was it on the market since the last price reduction 75? If thats the case put it on the form like this

Dom 75/225

 

[Steve Maxwell]

3-6 month calculated DOM(underwriter desired) is exceeded by your listing(225 days) and indicates a LP/SP ratio that may be greater than those Listing Comps you may have used (3-6 Mo). Can you do a calculation of sales in the 6-12 month range to see their LP/SP ratios. That would give you a factor to use. Almost every assignment I do these days includes two currently listed properties. I also tend to choose the most recent comparable listings so I don't end up with gross adjustments that you have to add commentary for. And I use a firm ratio like 93%(-7%), just in case the box checker looks closely at your 1004MC form.

 

[EXSTATECERT]

Adjust for time on market?
the norm is 90 to 180 and this is 225. What do they want?. What if the house wasn't finished being painted until 6 weeks after it was listed?. I will not ever adjust for time on market. Its the selling price that counts.

OK i re-read the post. Is this an active listing? If it is an active listing, i would not guess at the price it will bring. Completing an analysis of lp/sp will give an educated guess, but I would not guess at it.

Try to visualize the question the board will be asking, Where is the proof that the comp sold at this future price. Oh I see you guessed at it. OK, $2,500 fine and 120 hours of appraisal 101

 

[Kevin Mc]

I adjust all listings (when called for) by the LP/SP$ ratio for the neighborhood whenever possible. I do not adjust for days on market. If they are insisting you make such an adjustment ask them what formula you are to utilize for such an adjustment.

 

[Lee Lansford]

I'm being asked to adjust for days on the market on a listing(comp 4) I provided. I've never come across this before???? It is slightly past(225 days) the typical market time(3-6months) in the neighborhood. What say the experts???

I'd allow the underwriter to apply their own "adjustment", but I wouldn't be making such an adjustment an in appraisal for MV.

 

[Edward OConor]

DOM adjustment is another name for "the seller is an idiot for thinking his/her house is worth 50% more than everything else in the neighborhood" adjustment. m2:

Do you really know why the comp was on the market so long? Was the seller on vacation, in the hospital, in a mental institution (in the bed next to the underwriter) or maybe the showing hours were limited to when the owner was home between 9pm and 6 am every other Tuesday in months with 28 days?

I know, it took 180 days to clean up the smell from the meth lab and remove the bodies from the back yard before someone would make an offer.

IMHO, days on market is really useless information. Is the house worth more if it sold in 1 day?

 

[TJSum]

Mike, the MRIS allows you to check the price change history, most likely the list price has been changed during those 225 days. I'd rather reveal that than come up with some type of days on market adjustment. How many subject properties do they think are in this assignment?

 

[Southside]

DOM-Useless--Maybe in a " Stable" market, but not anymore in my neck of the woods.
No one out there ( besides us ) has a clue to whats going on.
Realtors-

 

[PropertyEconomics]

That remains pretty subjective .. its STILL on the market at 225 days but nothing says it wont take 552 days to see, as an example. I think I would look at the last price change, how the sales relate overall to days on market and their list to sales price ratios .... but to merely adjust based upon x days on market would assume immediate sale best as I can tell .... and adjusting listings is not an exact science anyway .. it gives you a soft cap on value at best.