Comp Sold 11/2007 And Now Its Back On The Market

[Lorenzo8]

I get mixed feedback for this. Theres a comparable sold in 11/2007 that I was thinking of using. Then when I go to the MLS listing history they just listed it for sale on 05/12/2008. Can we still use it as a comp. although it is currently listed on the MLS for sale? OR we can't use it because it is currently listed for sale. I keep getting different answers from appraisers.

 

[Tim Hicks (Texas)]

Things happen. People get transferred. Loans go in default. Divorces happen. There is no reason you can't use the sale as a comparable sale. Heck, I would probably add the listing as an additional comp just to show any market changes or support the market is stable.

 

[Michigan CG]

Absolutely you can use it. Is it listed for more or less than it sold for last year. And if it does sell you have a matched pair showing a trend.

 

[Wendy]

Ditto the Tim(s).

 

[SMF]

One thing you should be sure to do is try to verify this comp with the current owner to establish whether or not it was arms length or not, along with motivations for the original purchase and current listing.

 

[Louis Pompeo]

You can use it but have to include the current listing info in the report.

If it is listed for less than they paid for it, you have a problem.....in that you should be using comparables that reflect the CURRENT market. Even with a downward adjustment for time, it looks weak.

What may be better, is to use the sale in a "Matched Pair" or "same sale/resale analysis" to demonstrate the continuing weakness in the market - and not use it as a comparable in the sales comparison approach.

 

[Joyce Potts]

I'm just curious as to your mindset. Why would you not use that as a comparable sale?

If you had a legitmate, qualified sale 30 days ago and one day before your effective date that comp burned to the ground, how would that have disqualified that sale as a comparable for your purposes?

 

[Mztk1]

I had an underwriter who would always insist on not using a closed sale that was listed for sale again. We were on friendly terms since she always felt comfortable with my work, but we'd always battle it out through a middleman and I'd refuse to budge. Finally, on like the fourth of fifth one (remember when house after house was in Florida was selling 2X a year for the profit?), I called her direct. It turned out she wasn't questioning the use of the sale as a comp at all, she just wasn't putting 2 and 2 together so when she'd look at the comp picture and saw the for sign, she was convinced that I was using the MLS photo or had included the wrong picture in the report.

 

[CURT VAN HOOSER]

I get mixed feedback for this. Theres a comparable sold in 11/2007 that I was thinking of using. Then when I go to the MLS listing history they just listed it for sale on 05/12/2008. Can we still use it as a comp. although it is currently listed on the MLS for sale? OR we can't use it because it is currently listed for sale. I keep getting different answers from appraisers.

I'm confused... Did you find the sale (11/2007) on MLS or just the new listing?

 

[David Beasley]

Add a me too for using it as a comp. Provided its background check (sales history, arms length "appearing" from the deed that is dated to that sale, etc) comes out clean, a sale is a sale. It happened on a certain date in the past, a fact that cannot be changed. So what that it is currently listed?...As Tim said, stuff happens, people buy homes and sell them within months or even weeks for a myriad of reasons beyond flipping/illegal flipping. And as also mentioned, if the 11/07 sale was good, and this listing is above board and represents a value bump or decrease between its last sale and now, it could be a trend indicator if the current owner/sellers are still typically motivated and not distressed in any way.