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Comparable Sale Or Not?

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Jeff Horton

Senior Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Alabama
I have decided not to use this sale since I have other comps but curious how other would view this.

House shows in MLS as sold in January. Went out to look at the house and it has a new agents sign in the yard. I called the agent to make sure what happened. Seems the owner and wife were getting a divorce. Per the realtor the only way he could get her out of the house was to buy it. So he make an anonymous offer to buy the house and succeeds. When he take possession he immediately put it back on the market.

The sales price seems fair but that conditions of the sale concern me. As I said I have others I can use that don't have the headaches but is this a fair market sale or not? I can argue it either way. But I think underwriters might have a problem with the this one.
 

Wally Jones

Senior Member
Joined
Jan 23, 2002
Professional Status
Certified Residential Appraiser
State
Florida
Since you're aware of the somewhat unusual circumstances, I think you're right in not using it. At best, maybe consider it as a fourth comp and explain that the sale may not have been arm's-length.
 

Tawfik Ahdab

Senior Member
Joined
Feb 19, 2003
Professional Status
Certified Residential Appraiser
State
Oregon
It's not a market transaction. Why? It's not arms' length because the buyer is one of the sellers. The identity of the buyer should be separate from that of the seller and the relationship between them mildly "adversarial" rather than "collusive", to lift these notions from legal terminology. How is it possible for this transaction to fulfill the definition of market value requirement of " each [party] acting in what he believes to be his own best interest."? Answer: it isn't possible.
 

Bobby Bucks

Elite Member
Joined
Jan 27, 2002
Professional Status
Real Estate Agent or Broker
State
North Dakota
I'm trying to not to get bogged down with USPAP and arm's length transaction definitions......if I interpret this right, if I list my own house and I make an offer to buy it anonymously, is that a guarantee my wife will go away?
 

Mountain Man

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
Georgia
:rofl: :rofl:
Bucks, you can wish in one hand, and spit in the other. Which one will fill up first??
 

Richard Carlsen

Elite Member
Joined
Jan 15, 2002
Professional Status
Licensed Appraiser
State
Michigan
I don't think it qualifies for an arms length transacton despite the anonymous offer. Wait till he sells it the second time around.

Of course then you have to explain the second sale in under a year so it might not be worth the bother using it at all.

But if it is all you've got, you have to use what you got. right?
 

Ghost Rider

Senior Member
Joined
Apr 27, 2003
Professional Status
Banking/Mortgage Industry
State
Connecticut
If it was an anonymous sale, then I'd say it's usable, the problem I see is trying to explain why it is arms length when/if it gets reviewed, and the review appraiser slams it.

Its funny, but it's always the oddball deals that get reviewed.......If you have something better, I'd use it, just to save the hassles down the road, but, like Richard said, if it's all you got, it's all you got!!!!!
 

Jeff Horton

Senior Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Alabama
This is such a strange deal. After deciding not to use it I ended up putting it in as a fourth sale. My other sales fell apart under scrutiny and I thought I was going to have to use it.
 
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