Do you adjust listings in the grid?

[PropertyEconomics]

I agree with you Mr Carlsen but I still would caution anyone adjusting for a probable selling price as its forcasting a future event that cannot be proven. While they may be supportive they cannot be either predictive or used as true comparables as they have not closed.

 

[Mr Rex]

I adjust them based on the List/Sales ratio and then give them no weight. Killing 1 bird with 2 stones.

 

[PropertyEconomics]

I adjust them based on the List/Sales ratio and then give them no weight. Killing 1 bird with 2 stones.

Which ratio do you use Rex? The high indication, the low indication, an average? I never let the bird fly ... I include them but dont adjust for selling prices and then give them no weight.
Mdm Cleo in Florida got sent to prison for those false fortune telling things .. Im not getting involved in that stuff.
Its poor business practice in my opinion.

 

[Richard Carlsen]

I agree with you Mr Carlsen but I still would caution anyone adjusting for a probable selling price as its forcasting a future event that cannot be proven. While they may be supportive they cannot be either predictive or used as true comparables as they have not closed.

I quite agree with you. I do not consider them in the reconciliation or in the opinion of value mix. I do not put them in the sales grid but rather in an additional listing form within which I have the following statement pre-loaded:

"Sellers motivation in the above listings is not known. There is no indication in the listing data that the offering prices are reflective of market levels. These listings are added to the report either at the specific request of the client or as additional information for the reader. They are for information only and are not considered in the final opinion of value other than as indicators of market competition for the subject based on the Principle of Substitution."

 

[Kevin Keck]

I include adjusted listing at the request of the client. My former mentor's position was to include listings when necessary but not to adjust them. I think you could argue that you run a risk of producing a misleading report by providing adjusted listing no matter how clearly they are labeled. The industry seems to see things differently and many are now requesting adjusted listings. I have learned recently in declining markets it is best apply the list to sale price ratio from the most recent period possible. When I first started adjusting list to sale price ratio I would adjusted for the average list to sale price ratio over the past year. I have found my results are much more accurate by adjusting the average list to sale price ratio from the past 30-90 days.

 

[David Dietz]

Which ratio do you use Rex? The high indication, the low indication, an average?

How do you decide on a AS IS Value when you have a range then. The sale of the subject has not taken place but we predict what the price the subject would bring as of an effective date. If you do the research and make the appropriate adjustments you should make adjustments to the actives for L/S as well as for market exposure. It can be done and is done all the time in relocation appraisals.

 

[PropertyEconomics]

I include adjusted listing at the request of the client. My former mentor's position was to include listings when necessary but not to adjust them. I think you could argue that you run a risk of producing a misleading report by providing adjusted listing no matter how clearly they are labeled. The industry seems to see things differently and many are now requesting adjusted listings. I have learned recently in declining markets it is best apply the list to sale price ratio from the most recent period possible. When I first started adjusting list to sale price ratio I would adjusted for the average list to sale price ratio over the past year. I have found my results are much more accurate by adjusting the average list to sale price ratio from the past 30-90 days.

Until a reviewer gets your report, searches the sale that you forcasted to sell at $210,000 actually sold for $200,000 and turns you into the state board. And if you think it wont happen .. think again. I think forcasting is a very dangerous practice.

 

[Mr Rex]

Actually, PE, you can argue both sides. Not adjusting would be more misleading than adjusting in some eyes. The comments regarding your use of the listings and the adjustment or lack thereof would be in the same location.

 

[PropertyEconomics]

How do you decide on a AS IS Value when you have a range then. The sale of the subject has not taken place but we predict what the price the subject would bring as of an effective date. If you do the research and make the appropriate adjustments you should make adjustments to the actives for L/S as well as for market exposure. It can be done and is done all the time in relocation appraisals.

Actually Mr Dietz we estimate VALUE not predict price. There is a difference I think. And our value opinion is based upon actual market occurrances, listings havent sold therefore they cant accurately predict value.

 

[David Dietz]

How is that any different from a reviewer disagreeing with your value by 10k. The value and adjustments can be argued by anyone. You almost never see two two appraisers agree on a value to the dollar. You must simply back up your adjustments with data and market support.