Knowing pending sales price

[Fernando]

I'm fortunate to be doing 2 appraisals in same area. One is refi and the other is a sale.
Is it appropriate for me to mention the sales price of the pending sale (not disclosing I'm the appraiser doing that appraisal) that the sales price is anticipated to be $X,zzz,zzz?
Pending sale has ratified offer significantly higher.

 

[CGinMN]

I work a small market and often have orders come across with the sale price on bid sheet. Occasionally I am asked to bid orders and the contract is attached. Even if I don’t quote the job I make note of the price and put it in a special file in case I use the pending as a comp.

In this case I’d say you owe your client confidentiality so best practice is to ask them if it’s ok (the lender). If they say its ok then mention in the report you’re the appraiser and use the contract price. If the lender says no it’s confidential I would just make a rounded adjustment that hopefully lines up with general list-to-sale price ratios for that market segment.

 

[George Hatch]

One of the reasons for citing comparables in the first place is to convey what info a well informed buyer or seller or broker would be aware of and would be comparing to the subject when making their decisions. They cannot consider info that they don't have access to. On that basis I favor reporting what info is accessible, and if I'm aware of additional info I can explain that I am sticking to the available info for that reason. Same with sales that close after my effective date.

 

[Fernando]

I work a small market and often have orders come across with the sale price on bid sheet. Occasionally I am asked to bid orders and the contract is attached. Even if I don’t quote the job I make note of the price and put it in a special file in case I use the pending as a comp.

In this case I’d say you owe your client confidentiality so best practice is to ask them if it’s ok (the lender). If they say its ok then mention in the report you’re the appraiser and use the contract price. If the lender says no it’s confidential I would just make a rounded adjustment that hopefully lines up with general list-to-sale price ratios for that market segment.

When I see bids for purchases and the price is disclosed, I'm shock to see the privy price is sent out. As an agent, I don't want the sales price sent out for all appraisers to see.
Not only will I have to ask lender, I need to ask agent whether it's appropriate to mentioned the actual ratified offer price. As an agent, I don't want noninvolved parties to know the purchase price until all contingencies are removed. I'll see what I will do while working on the report but at least I know the sales price for the pending sale and there's an ADU not mentioned in MLS which really helps in understanding the current market. Which brings to next question, should I mention ADU for the pending sale in my refi appraisal?

 

[andrew81]

I'd use contract price, site the listing agent as source, and not mention anything about having completed a recent appraisal on the comparable listing.

 

[Tom4value]

I'm fortunate to be doing 2 appraisals in same area. One is refi and the other is a sale.
Is it appropriate for me to mention the sales price of the pending sale (not disclosing I'm the appraiser doing that appraisal) that the sales price is anticipated to be $X,zzz,zzz?
Pending sale has ratified offer significantly higher.

Since the pending sales price of the subject property of one of your appraisals is privileged information and not public, you have a confidentiality responsibility to that client. Therefore, no, do not disclose it. Instead, use your information in your reconciliation if you wish.

 

[ZZGAMAZZ]

Since the pending sales price of the subject property of one of your appraisals is privileged information and not public, you have a confidentiality responsibility to that client. Therefore, no, do not disclose it. Instead, use your information in your reconciliation if you wish.

The appraiser can always just ask the listing agent of the property he's appraising if the contract price can be disclosed, same as if the appraiser was contacting the agent of any pending sale.

HOWEVER, maybe Fernando's perspective could be flipped, so appraisers could use the appraised value of any pertinent property as a comparable, because theoretically there shouldn't be a difference between the appraised value of a residential property,and the selling price of that property on the effective date--if it was for sale--although this is obviously contrary to prevailng industry protocol, although the sheer quantity of re-fi's would reveal data that would smooth itself into Market Value more accurate than Market Value based on tangible, open-market, arms-length transefers...

 

[TerryRohrer]

The appraiser can always just ask the listing agent of the property he's appraising if the contract price can be disclosed, same as if the appraiser was contacting the agent of any pending sale.

HOWEVER, maybe Fernando's perspective could be flipped, so appraisers could use the appraised value of any pertinent property as a comparable, because theoretically there shouldn't be a difference between the appraised value of a residential property,and the selling price of that property on the effective date--if it was for sale--although this is obviously contrary to prevailng industry protocol, although the sheer quantity of re-fi's would reveal data that would smooth itself into Market Value more accurate than Market Value based on tangible, open-market, arms-length transefers...

Bad idea here. When we start treating opinions as facts there is no point in what we do. How can you possibly argue that the appraised value is equivalent to s selling price?

 

[ZZGAMAZZ]

Bad idea here. When we start treating opinions as facts there is no point in what we do. How can you possibly argue that the appraised value is equivalent to s selling price?

Definition of Market Value could be perceived to correspond more so with the appraised Opinion of Value than the Selling Price of a residential property, which we all agree isn't as accurate as its adjusted value.

 

[TMG]

I almost always call the agent on pending sales to get the contract price. 9 x out of 10 they'll tell you.