Most weight to pending sales!

[Ariba]

When analyzing your appraisal data does anyone give the most weight to pending sales and/or active listings? Do pending sales and/or active listings better reflect the current market than closed sales that may have been closed 3-6 months earlier? In a declining market you your opinion of value will be below the latest closed sale.

On active listings do you call the agent to see how many showings? According to industry standards suggest that if the agent haven't received an offer after 8-12 shownings, a price adjustment is probably necessary. Do you consider that?

If you do use active listings in your appraisal report to support your opinion of value, how do you adjustment in your grid to reflect active listings? Which price differential do you use for you active listings: sold to list, net sold to list, sold to original, or net sold to original?

 

[Farm Gal]

Ron -

If pending sales support an active trend as evinced by CLOSED sales - they are mentioned...

If they show a huge skew up or down it may affect the way I develop the reconciled opinion of value based on the closed sales...

Weight? not so much - - it ain't over til the fat lady sings with check/closed sale in hand. Closed sales.

Pendings and listings are otherwise just grist for the mill - support for the trends... which are market EVIDENCE of closed sales.

told ya four times there didn't I

 

[Mike Boyd]

I don't "give weight" to listings that have not sold and escrows closed. I make date of sale adjustments and also consider the time on market. I talk to the agent to determin how long it has been on the market since the last price reduction. If that time on the market after a price reduction is made is unreasonable, I do not use that listing.

Once I make the date of sale adjustments, I will give most weight to THE SALE that is most like the subject and if none are any more similar than the others, I weight the bracketed indicated value.

 

[Riick]

How much weight can you give to something that hasn't happened yet?
Actives - may never sell.
Pendings - have a tentative price and terms, but subjet to change before settlement.
There's many a slip between cup and lip.
_______________________________________________________________
"All Animals are equal, but some are MORE equal"– a future president

 

[Richard Carlsen]

Pending sales as far as I am concerned are a meeting of the minds between buyer and seller on price. The ability of the buyer to perform on the contract has not yet been demonstrated. A buyer who is ready, willing and able to buy is a qualified buyer as far as I am concerned. Do I give weight to a pending? Certainly. Do I give most weight to a pending? No. I rarely give most weight to any one sale for the simple reason that we rarely have a sale that can be considered a "true" comp; that is, nearly identical physically, functionally and locationally. When I get those I normally make an announcement to the world by posting that fact here on the Forum. What I normally see is a pending with several comps that are older in age which tends to give me an indication of what the market is doing between these sales and the current time. It is upon that indication that my reconciliation takes me up or down from the Weighted Adjusted Sales Price of all comps.

It is well known that UW's like to have you hang your hat on one comp but I generally use the Weighted Adjusted Sales Price of all comps as my initial indicator of Market Value and go from there through the reconciliation process. At that point, it is more judgmental on what the market has done and is currently doing allowing me to use my knowledge of the market to estimate the current MV of the subject.

On active listings do you call the agent to see how many showings?

No. It is active without a pending agreement and I can tell by the DOM how long it has been active. I will seldom estimate a value higher than the Adjusted Indicated Offering Price of a comp but it has happened. Most often the higher estimate of value is based on some market reactions that cannot be quantified in the Sales Grid. However, I don't think that my estimate of value has ever been over +1% above the adjusted offering price of a listing.

 

[Thomas N. Morgan]

.

I would discuss pending sales and listings, but I would not grid and adjustment them. It' would be just one more step in aiding the lender in their delusional thinking.

 

[Elliott]

I wouldn't base a conclusion on marriage giving most weight to
engagements.

 

[Jungle Boy]

It depends.

If the most recent market data of closed sales is not adequate to base a value on, then pendings and listings should be considered.

Here's an example.

I just completed an appraisal report this morning. The most recent closed sale was 12/31/2007. There are 12 actives, and 3 pendings in the neighborhood.
Most weight was given to the most recent closed sale, followed by the most similar pending sale (spoke at length with the listing agent).
The 2 other closed sales indicated much higher values than the pending did. Due to declining prices in the area, I decided that even if the pending does not close, it does constitute market activity which can be relied upon.
Comparable active listings all indicate lower values that the earlier 2 closed sales.

 

[The Warrior Monk]

Closed, listing, and pending sales are all important pieces of the valuation puzzle, and all should be considered. Determining which is more relevant depends on the data available.

Pending sales and listings are often much more important than closed sales in valuing property in transitioning markets. A dozen sales that occurred 6-12 months ago is less important in a current valuation than the fact that there are no similar properties listed for greater than $210,000, and no pending sales above $200,000.

 

[CANative]

If we're making changing market condition adjustments based on listings and pendings and otherwise using pending sales to fine tune not-so-great sales comps aren't we really "weighting" pending sales... just not saying it?