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How do you define "offered for sale"?

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athome77

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Member
Joined
Apr 1, 2008
Professional Status
Certified Residential Appraiser
State
Illinois
Completed appraisal on SFR purchase being sold "by owner" to neighbor across the street. Contract indicated typical transaction except seller is including furniture in sale. Appraised value 12% below contract price (big shock). Property has not been listed on the MLS or any other verifiable data source. On page one of 1004 which asks "Is the subject property currently offered for sale or has it been offered for sale in the twelve months prior to the effective date of this appraisal" the box marked "No" was checked and the following comment was provided:

"According to the NIMLS, the subject has not been listed for sale in the past twelve months. The subject is being sold 'by owner.'"

Got the following condition today: "If there is a contract for sale, the subject has to be offered for sale. Please check the appropriate box."

What would you do?
 

Paul Isolda

Senior Member
Joined
May 20, 2004
Professional Status
Certified Residential Appraiser
State
Connecticut
In my area, well over 90% of properties sell through the MLS. If the property was not listed on the MLS, it has not been offered for sale by the traditional means for this area. What if someone knocked on their door and said "I have to have your house, how much?", and a deal was struck. There is an agreement for sale but the property was not offered for sale. The statement "If there is a contract for sale, the subject has to be offered for sale" is not valid.
 

Tom Woolford

Elite Member
Joined
Nov 20, 2005
Professional Status
Certified Residential Appraiser
State
Florida
Did he advertise the home at all?
 

athome77

Thread Starter
Member
Joined
Apr 1, 2008
Professional Status
Certified Residential Appraiser
State
Illinois
No advertising. Elderly couple moving out of state selling to neighbors. Spent some time revieing FNMA Guidelines, but can't find specific reference to this section of form. Anyone?
 

Smokey Bear

Elite Member
Joined
Dec 8, 2004
Professional Status
Certified Residential Appraiser
State
California
Don't confuse offer and marketing. A purchase contract is an offer, and becomes a contract when both parties have signed. While this property hasn't been on the open market, legally it has been offered for sale.
 

Old Man

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Dec 4, 2007
Professional Status
Licensed Appraiser
State
Arizona
Don't confuse offer and marketing. A purchase contract is an offer, and becomes a contract when both parties have signed. While this property hasn't been on the open market, legally it has been offered for sale.


I agree. You could also contact the property owners and ask how the agreement between them and the buyer came about.
 

Couch Potato

Elite Member
Joined
Mar 15, 2004
Professional Status
Certified Residential Appraiser
State
North Carolina
Don't confuse offer and marketing. A purchase contract is an offer, and becomes a contract when both parties have signed. While this property hasn't been on the open market, legally it has been offered for sale.
Yep, can't have a contract without the owner offering to sell.
 

Tom Woolford

Elite Member
Joined
Nov 20, 2005
Professional Status
Certified Residential Appraiser
State
Florida
Don't confuse offer and marketing. A purchase contract is an offer, and becomes a contract when both parties have signed. While this property hasn't been on the open market, legally it has been offered for sale.


Excellent point.
 

athome77

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Member
Joined
Apr 1, 2008
Professional Status
Certified Residential Appraiser
State
Illinois
If the seller, without having made any effort to sell the property, is approached a buyer and agrees to sell, at what point was the property "offered" for sale?
 
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RSW

Elite Member
Joined
Feb 18, 2002
Professional Status
Certified Residential Appraiser
State
Tennessee
This is the wording on the URAR 2005 form:

Is the subject property currently offered for sale or has it been offered for sale in the twelve months prior to the effective date of this appraisal? Yes No Report data source(s) used, offering price(s), and date(s).


The key word is offered not listed or marketed. So, if the subject is under contract it had to have been offered for sale in order for it to be under contract. That is what you you report.
 
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