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List To Sale Ratio Adjustment

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JT1599

Thread Starter
Freshman Member
Joined
Dec 19, 2007
Professional Status
Certified Residential Appraiser
State
Florida
The Lender Is Requesting To Provide A List To Sale Ratio Adjustment To Recent Active Listings To Adjust Final Value Assigned. I Have Done This In The Past But In This Market What Do You Guys Think I Should Do. In My Opinion The Ratio Can Vary Depending On How Motivated Is The Seller...please Help
 

Farm Gal

Elite Member
Joined
Jan 14, 2002
Professional Status
Licensed Appraiser
State
Nebraska
Hunh? :huh: They want a ratio for THEM to adjust a Final Value Assigned???

or are they asking YOU to do that?:unsure:

Compunding your problem is getting the lender to specifiy ORIGINAL listing price... or 'MOST RECENT'..

...if such are reasonably available in your work area database.

Good luck with that!

Best find out what they REALLY want - to chop a value so as to look good for the end user (safe lending) or to kill the deal:leeann:
 

PropertyEconomics

Elite Member
Joined
Jun 19, 2007
Professional Status
Certified General Appraiser
State
New Mexico
This topic has been thoroughly discussed in other threads. The outcome was not so pretty.
Id search and read that thread.
 

JT1599

Thread Starter
Freshman Member
Joined
Dec 19, 2007
Professional Status
Certified Residential Appraiser
State
Florida
They Want me To Give The List To Sale Ratio(a Percentage) And Adjust That To The Active Listings
 
Joined
Jun 3, 2005
Professional Status
Certified Residential Appraiser
State
Colorado
Here's an example of my standard comment:

COMMENT ON LIST PRICE TO SALE PRICE RATIOS

The sale prices in this sub area generally range from 90% up to 102% of the list prices. For the purpose of this report, the list price of the under contract (or active listing) comparable was discounted by $10,000.

I've used discounts as low as $6k up to $100k -- whatever seems appropriate for the range of list price to sold price in the sub area. When this stip first showed up, I described the discount as a percentage; since then, I just give them the actual discount, and limit the percentage estimates to the range of list-to-sold prices in the sub area. (I try to use under contract comps whenever possible, since there is at least one buyer that has struck a deal for it.)

Good Luck!
 

Mike Kennedy

Elite Member
Joined
Sep 28, 2003
Professional Status
Certified Residential Appraiser
State
New York
Premise: the closed sale and active listing comparables ARE within the subjects' local market.

Unless all the closed sales utilized sold at 100% of LP, extracting the discount and applying it to Actives reflects the actions / negotiations of typical buyers demonstrated by the closed sales. Further, actives / contracts typically further support the FVO indicated by the MOST SIMILAR, confirmed, closed sales. i.e. lesser or little weight is placed on the Actives/Contracts. Therefore, it is entirely probable, definitely conceivable, LP/SP extracted discounts applied to the comparable Actives/Contracts will have NO, or very little impact on the Final Value Opinion. If the actives are Over-Listed (again market-indicated), they have no place in the appraisal except in Comments indicating why they are not reliable value indicators. Those supporting comparables serve to further support the market conditions statements and illustrate the most competitive AVAILABLE substitutes for the Subject.
 
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JT1599

Thread Starter
Freshman Member
Joined
Dec 19, 2007
Professional Status
Certified Residential Appraiser
State
Florida
Thank You Thats Pretty Much What I Had In Mind Just Needed Some Outsource Opinions
 

ZZGAMAZZ

Senior Member
Joined
Jul 23, 2007
Professional Status
Certified Residential Appraiser
State
California
Woa...

At some point in time the market is going to become stable with 100% list to sale price. [That point is already visible in numerous markets.]

If the current active listings are well below market value established by closed sales (even those that sold within the past 30 days) I would be cautious about the predictive ability of past list/sale prices. One could easily cry wolf and create further downward pressure...

(in my opinion based upon limited prior knowledge of this type of declining market)
 
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