How do you define "offered for sale"?

[athome77]

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]

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]

Did he advertise the home at all?

 

[athome77]

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]

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]

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]

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]

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]

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?

 

[RSW]

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.