Median Sale Price as % of List Price

[NJ Valuator]

Is this calculated by dividing the Median Comparable Sale Price by the Median Comparable Listing Price OF ACTIVE UNSOLD LISTINGS?

OR

Is this calculated by dividing the Median Comparable Sale Price by the Median Comparable Listing Price OF CLOSED SALES?

 

[VegasWayne]

This is calculated by dividing the sale price by the list price for each closed sale and taking the median of the results.

 

[NJ Valuator]

That is what I always knew, however, for 1004MC purposes, Henry Harrison's book is saying that it is calculated based on the Median Comparable Listing Price of Active(Unsold) Listings. In other words, he is saying that it is calculated by dividing the Median Comparable Sale Price by the Median Comparable Listing Price of Active(Unsold) Listings not closed sales.

 

[George Hatch]

I think HH is wrong on this one. The question does not read

"Median Sale Price as % of Median List Price"


And, comparing medians would be meaningless. No appraiser does that; when we look for that ratio or percentage we always look at the sale's own listing, not all listings.

 

[Randolph Kinney]

Of course, we can set up the debate now for what to use on that property that sold to compute the median list price; Original list price or list price at the time of contract?

For those entities / clients that want all listings used in the appraisal report to be adjusted by the SP/LP ratio ...

 

[moh malekpour]

Why there is a need for the ratio of sales price that is already closed to its listing price before it was sold? The simple answer is to find out if a property is listed for X amount, what would be its possible sold price assuming it was listed and marketed correcly? This ratio will provide a factor for the appraisers to use for adjusting the listing price which is used as comparale listing. The current listing price cannot give any idea to the appraiser that how much that aproperty is going to sell because it is has not sold yet or it may neve sell. I have seen active listing that was revised 5 times and finally sold with its 5the revised listing price. I think Henry is wrong on this one

 

[NJ Valuator]

Another thing I am confused about, for the Median Comparable List Price do we enter the median list price of current active unsold listings or do we enter what the median list price was for the closed sales? I would think that it would be the former because the next question asks for the Median Comparable Listings Days on Market and this is different from the Median Comparable Sales Days on Market.

My ACI software program automatically calculates the Median Sale Price as % of List Price by dividing the Median Comparable Sale Price by the Median Comparable Listing Price. Now assuming that the form wants us to enter the median list price of active unsold listings as compared to what the median list price was for the closed sales then Harrison would be correct.

 

[VegasWayne]

The training video available at efanniemae.com states that the method described by HH is incorrect. Wintotal used to try to calculate this ratio on the first version of the form, now they don't.

 

[mike32716]

The training video available at efanniemae.com states that the method described by HH is incorrect. Wintotal used to try to calculate this ratio on the first version of the form, now they don't.

Same with ClickForms. On the old version they calculated it (the inverse) and on the new form they do not. They stated that they checked with FNMA. In the AI course I took there were many questions pointing out the discrepancy between HH and the AI. Been a long time fan of HH and even took some of his courses back in the 80's, but I think he's wrong on this and the period segemented active listings issue.

To be fair FNMA has been dribbling out information on this form (probably because they now realize how useless it is).

 

[NJ Valuator]

Response from Rattermann

I sent the following email to Mr. Rattermann:

Hello Mr. Rattermann,

I watched the 1004MC training video and just had a couple of questions.

Median Comparable List Price:
Is the form looking for the median comparable list price of active unsold listings or what the median comparable list price was for the closed sales?


Median Sale Price as % of List Price:
Should this be calculated by dividing the Median Comparable Sale Price by the Median Comparable Listing Price of active unsold listings OR by dividing the Median Comparable Sale Price by the Median Comparable Listing Price of closed sales?




Mr. Rattermann's response:

"If you can get it, the median comparable list price is the median list price of the accumulated active listings during the time window. This means the median price for properties that were active on the first day of the window plus anything that was added as an active listing during the period. This is nearly impossible to get in most databases, that is why it is shaded".

"The median sale price as a percent of list price is an easy number to get because it is the median sale price in the window divided by the median list price of the COMPARABLE SALES. Both numbers are from the comparable sales".


So Harrison is wrong.

Also, in order to avoid confusion, I think the form should word it as Median Comparable List Price of Active Listings. I also think that there should be another row for us to report the Median Comparable List Price of Closed Sales. Otherwise, this is going to cause confusion with underwriters because they are going to come back to us and say why is the Median Sale Price as % of List Price different than the Median Comparable Sale Price divided by the Median Comparable List Price(of active listings) on the form.