Most weight to pending sales!

[Mike Boyd]

[QUOTEon the other hand are something unknown. Some of them are listed based on the current market supply/demand and some are illogically overpriced. It is hard to make a judgment on active listing until it gets at least a tentative offer which is a period prior to pending. In my area it is called back up offer meaning there is an offer but it is uncertain. However, some active listings in a slow market which are in the selling zone are very good indicators of market trends but those which are out of selling zone are just statistics until they are adjusted to the selling zone. It is the appraiser's job to find out which listing is in the selling zone and which one is not.[/QUOTE]

I agree, Moh, but sometimes you can make a sub-analysis comparing the active price to the pending price. Doesn't always work but something to keep in the back of your mind. It is an example of the creative thinking that is the "artistic" part of an appraisal report.

 

[Mike Boyd]

How did the destruction of the property three days after the seller and buyer had a 'meeting of the minds' and agreed to sale price not afford a good market indicator?

Because it is not verifiable. If the bread winner got fired from his job the day before closing because the factory shut down, do you think they would still sign the loan docs? And, do you think that "the meeting of the minds" would still be meeting?

 

[Mike Boyd]

The problem here is that listing agents generally won't share the contract price on pending sales. Couple that with the fact that so many pendings never make it to the closing table (at least for now). For months I've had realtor friends tell me about entire monthly pipelines of pending sales being wiped out before they could close.

THAT would be a factor to consider, also. How often does it happen? Knowledge of the market is obtained not only from printed statistics but from interviews, conversations and attending broker meetings.

 

[Mike Boyd]

. If they will not give the actual price, most will give me a percentage range of list (ie: contract is within 3-5% of list). Key is to get a conversation going about other topics and then slip the 'ol contract question in at the very end.

There ya go. Get creative with your interviews and conversations. If you want something from someone, first give something to THEM. I have started conversations with..........."Hey Sally, I hear you're leading the pack at XYZ Realty." Converse with ..."I bet you got a good price on your listing over on Elm Street. Did you get many offers? How long between the latest price reduction and pending?" Beat around the bush a little, then, work in what you really want to know. Ask for her help since SHE is an expert in that neighbood. Be a salesperson!

 

[CURT VAN HOOSER]

How often do you see listing prices that are lower than sale prices? In my area, next to never! Where do you think the realtors are coming up with their listing prices? From the closed sales! But they list just a little higher, in case you get that one fish that bites. Why list lower than the closed sales if you can get just a little more for your listing?

I don't put much reliance on active listings at all. You can list your house for whatever you want to. Most people know about the slump in the market, but, of course, their house isn't affected by it. Active listings are only one part of the final equation. We know what you want for it, but what is someone willing to pay for it?

Using and adjusting for active listings is absurd unless there are lower listings out there, which, I'm sure, is rare. I haven't seen any yet. They do nothing but muddy the waters. If you want to find a decline in a market, look at sale trends over the past month compared to the month before and so on... Even in a declining market, listing prices still tend to be a little higher than sale prices.

Without buyers, sellers have no marketplace.

Good morning. I live in sunny SoCal and I assure you that, in many of my markets, active listings and pending sales are below the most recent sales. Many times, the most recent sales are several months to a year or so old. I have neighborhoods with 80% REO and short sale activity. Most of these properties are in good condition. I have to consider these properties....

 

[c w d]

I have noticed a trend. The posters that most vehemently fight to not consider listings or pendings seem to come from California and Florida, 2 of the areas of the country that are widely recognized as declining. Speaks volumes about how those markets got to their current condition.

Excuse me?!? If you're going to render such an opinion about 1) someone you don't even know from 2) a mostly civil discussion on a forum it speaks volumes about you're practices. What do you do? Search for comparable sales based on sale price and date with emphasis on price? That doesn't take much time to investigate either.

I didn't consider listings and pendings in my final opinion of value when the market was rocketing for the stars. To do so would have contributed to the over inflation of the real estate market in my area. Wouldn't you agree? I know all the skippy's were basing their appraisals off active and pending regardless of what the closed sales were telling them. I saw it on many occasions from appraisals we reviewed. Next time, why don't you think through your accusations before you stick your foot in your mouth.....again.

As for the rest of others that replied to my previous reply, I understand what you're saying, I just don't agree with it.

 

[Mr Rex]

Excuse me?!? If you're going to render such an opinion about 1) someone you don't even know from 2) a mostly civil discussion on a forum it speaks volumes about you're practices. What do you do? Search for comparable sales based on sale price and date with emphasis on price? That doesn't take much time to investigate either.

I didn't consider listings and pendings in my final opinion of value when the market was rocketing for the stars. To do so would have contributed to the over inflation of the real estate market in my area. Wouldn't you agree? I know all the skippy's were basing their appraisals off active and pending regardless of what the closed sales were telling them. I saw it on many occasions from appraisals we reviewed. Next time, why don't you think through your accusations before you stick your foot in your mouth.....again.

As for the rest of others that replied to my previous reply, I understand what you're saying, I just don't agree with it.

And to not consider them will likely contribute to over valuation in a declining market. Wouldn't you agree?

 

[Joyce Potts]

Because it is not verifiable. If the bread winner got fired from his job the day before closing because the factory shut down, do you think they would still sign the loan docs? And, do you think that "the meeting of the minds" would still be meeting?

The price, and the market condtions both parties were operating under, is valid and reflective of market conditions as of the date of the contract, and lets not forget the binder deposit, if any--but there ususally is even though it's not required in Florida.

The closing date is the formality of the exchange of monies and the title changing hands.

How does the destruction of the property diminish the what both parties where thinking when they set that contract price?

It's a valid piece of information. Not the full story. I've used it many times EVEN FOR FNMA and will continue to do so.

How about an analogy? Based on your premise, palimony suits would be non-existent. After all, they never made it to the altar. Screw the promises and intent and the frame of mind when those promises were made.

 

[Joyce Potts]

I have noticed a trend. The posters that most vehemently fight to not consider listings or pendings seem to come from California and Florida, 2 of the areas of the country that are widely recognized as declining. Speaks volumes about how those markets got to their current condition.

Not from this appraiser.

 

[Mr Rex]

The broad brush was not meant to cover all FL or CA appraisers. But there has been a trend of the folks that have complained the loudest since some lenders started asking for actives in declining markets. Just an anecdotal observation.