Listing and Pending: "arm length" or "listing"?

[residentialguy]

My disagreement is reporting that it is Arms Length rather than Listing.

It is a pending sale. They want you to describe what type of sale that pending sale is....just like you did for the subject. Why is that so hard?

What do you put for the subject contract? Once you answer that, why wouldn't you do the same thing to describe another contract? m2:

that comp 5 is an REO home listing that has a contingent contract, for example.

And if the subject was a contingent REO contract, how would you describe that type of sale? I'll answer: you would choose the option that says it is an REO type of sale, just like you would all the other comps. Good grief!

 

[Sarge]

It is a pending sale. They want you to describe what type of sale that pending sale is....just like you did for the subject. Why is that so hard?

Not hard at all...and to be honest it makes no freaking difference. Before the UAD did you report that your active/pending comps were going to be a Conv Loan, FHA Loan, etc or just Pending Sale. I will bet all the money in my wallet ($37 whole dollars...woohoo) versus all the money in your wallet that you just put Pending Sale, Active Listing, etc. It is not being misleading at all. You are appraising the subject for a sale. The pending sales are NOT being appraised as a SALE. They are just properties that are listed that are under contract....NOT SALES!

 

[Sarge]

It is no wonder why USPAP is so effed up. This is a mundane detail that means absolutely nothing and we still can't get a consensus on it. No one is misleading if they put Listing instead of Arms Length residentialguy. In fact, I bet at least 95% of the appraisers today are doing it.....but probably more.

I've been trolling for a while and still think you are a genius residential guy...just disagree with you on this! Would still buy you a beer if you are ever in the Dallas area!

 

[residentialguy]

Not hard at all...and to be honest it makes no freaking difference. Before the UAD did you report that your active/pending comps were going to be a Conv Loan, FHA Loan, etc or just Pending Sale. I will bet all the money in my wallet ($37 whole dollars...woohoo) versus all the money in your wallet that you just put Pending Sale, Active Listing, etc. It is not being misleading at all. You are appraising the subject for a sale. The pending sales are NOT being appraised as a SALE. They are just properties that are listed that are under contract....NOT SALES!

This is where you are misguided. It is not about whether it is conventional, FHA or VA....it is the other descriptives. It is whether it is a REO, Short Sale, Court order, Estate, Relo and non arms length, etc...that DOES make a HUGE difference!! That information needs to be up front and is not a "mundane detail" - those are all different markets. The UAD uses the same descriptives for the subject pending sale as they do the comps. They are all the same and should be presented the same - to do otherwise would be confusing at best, and have the appearance that you're trying to bury something and be misleading. I don't mind that you disagree, but you need to keep your eyes open. I've had many instances that I disagreed, but I changed my position because I saw the logic in it - happened just recently with reporting the comps age at the comps date of sale. Just disagreeing and saying your buddies do it - that's not a defense. Everything you do needs to be defensible. I'll ignore your silly comment that 95% of appraisers are doing it incorrectly. I know too many appraisers that are doing it correctly. I will take you up on that beer, though.

 

[J Grant]

Imo, a pending sale or listing has different features than a closed sale.

There is sale type, which is identifiable in both a listing and a closed sale...if it is a short sale, REO owned, etc, and that should be disclosed about all listings, not just pending sale listings.

However, the financing is not final until it is a closed sale. Therefore, in a pending or contingent listing, it is not correct to list the financing, such as FHA or conventional, or cash etc. Many transactions change financing types bedfore the closing, and there is no way for the appraiser to anticpate that.

For example, many contracts are written up as cash, but the buyer takes a mortgage anyway (which they are allowed to do, with a cash contract). Some realtors are so dense they don't understand that and certainly won't bother telling an appraiser about it, (nor should they, listing information is confidential till it closes). Some FHA borrowers switch to conventional, and vice versa.

 

[Tim Hicks (Texas)]

If you know the the listing or pending is a short sale listing or REO listing, then you mark it that way on the UAD. I believe that actually want to know the actual truth on these things. I also believe they did not think through the format very well when they designed it. Location should have the subdivision, etc

 

[residentialguy]

I don't believe active listings belong on the sales approach. If you have an separate gird, you are better off putting them on that, imo. If you do put actives on the SCA, I would put them on the comps 6-9 page and put state them like this:
1st line: "listing",
2nd line: leave blank or choose "other" and insert ListSaleVar (where you adjust the typical list to sale variances in the market)
3rd line: "Active"

Does anybody use a software that does not have a listing grid available to them?


A pending sale is much closer resemblance to the sale then a listing. They are market indicators and they have the ingredients of a sale...just hasn't closed. Yes, things may change before closing, (which you would explain) but typically they do not. Even if it does fall apart, say because the buyer couldn't close on his other house, that meeting of the minds is a market indicator.
State the actual contract, if the agent tells you. Otherwise, the agent will probably tell you that you are real close if you start shooting them some figures. (Explain that the contract price could not be verified and may be different)
1st line: Arms Length or what ever type of sale it is.
2nd line: Conv;5000 - if you verified this. If you can't verify this, select the "Other" option and put Unknown
3rd line: "Contract"

By doing it this way, it tells the complete story on the grid. You don't find something different when you read the additional comments, which is important since half the time they don't read the additional comments.

 

[Mike Garrett RAA]

I Always preferred to use " under contract"....not to muddy the water. Logic tells me a pending is still a listing.

 

[Howard Klahr]

listing information is confidential till it closes

Now where is that written?

This discussion would be a lot easier if everyone would just stick to the main point and stop introducing extraneous issues.

And by the way, Mike and Res have it correct. It is not really that complicated. Sold is sold, Active listing is an Active Listing and Pending has a contract as of the effective date. Even real estate agents get this point.

Arms length refers to the parties of a transaction. Obviously a listing is not a transaction, but pending by definition is a transaction with identifiable parties. They are either arms length or they are not. Do not confuse conditions of sale with arms length. They are not the same.

UAR was intended to standardize the information in appraisals and appraisers cant even follow the instructions as listed. I can't wait to see what Fannie/Freddie, regulators and the ASB come up with next.

 

[residentialguy]

I Always preferred to use " under contract"....not to muddy the water. Logic tells me a pending is still a listing.

I always preferred Superior Similar and Inferior..or Year built for Age...but like "under contract", those options are no longer options.

Listing is meant to mean "Active Listing" (or expired listing or canceled listing) with UAD. Contract is meant to be a sale that has not closed...you choose which type of sale it is...ArmsL, REO, Short, etc. or as Howard eloquently said "Arms length refers to the parties of a transaction. Obviously a listing is not a transaction, but pending by definition is a transaction with identifiable parties. They are either arms length or they are not"