Pending Sales as comps

[SteveSpy]

Hello:

I am appriasing a rather unique gut-rehab condo. I have a few comps of similar properties in the area, but I feel the best estimate of value would be the sales of the other identical units in the complex (there are three of them).

Usually I write an addendum listing pending sales and listed properties that have been taken into consideration. Does anyone feel it resposible to list one of these 'pending sales' in the comparables grid on the 1073? If so what verbage do you include. I have spoken with all the agents and the developer, and all the contract will go through within 30 days, however, I am appraising the unit that will close first.

Thank you for your help. Everyone on this board is extremely thoughtful and appreciated!

Steve

 

[Pamela Crowley (Florida)]

Personally, I would use it as a 4th comp only and use a sale from another project for the 3rd comp.

 

[Mike McBeth]

I use pending sales and listing to support 3 or 4 sales. I identify them in the grid and comment that they are used to demo the market's attitude and trends and are supportive of the final value estimate.

 

[Jo Ann Meyer Stratton]

Fannie Mae requires the first three comparables to be closed sales. Comparables #4 and higher can be active, expired, pending, withdrawn, or without any sales price something for illustrative purposes only. Section 406 - Sales Comparison Approach to Value (6/30/2002 guidelines). Section 406.02 "The appraiser must report a minim7um of three comparable sales as part of the sales comparison approach to value. The appraiser may submit more than three comparable sales to support his or her opinion of market value, as long as at least three are actual settled or closed sales." And lots of other good stuff.

 

[Mike Garrett RAA]

I almost agree.....

Fannie says three closed sales if you have them. In the event there are not three then you could use a pending or even a listing. Just remember those are guidelines...not rules or law.

If I had a complex that had been renovated and was substantially different from prior sales I would consider those pending sale as more representative of the market. If you have competing projects that are comparable, by all means, use those sales.

Think about it this way....They want you to report on the marketability of the subject property. What better than a pending sale in the same complex of a re-hab'd unit? Some times you have to go with what you have to work with rather than trying to make your report fit some little box. The secret is to explain, explain, explain!

 

[Bobby Bucks]

I've used pending sales as 4th and 5th comps on occasion. The only time I've felt it was necessary was in new home developments when there has been a recent price increase. I include an extra comp or 2 as pending sales with the higher price. I make appropriate time adjustments for sales 1, 2 and/or 3 with LOTS of comments and support. Sometimes I even go so far as to ask for data on the pending sales from the agents......sometimes they'll even fax you the sales contract for the pending sales......sure, it's confidential and foolish on their part, but it supports my adjustments!

 

[SteveSpy]

I will use the pending sales in the developement as comps 4-5, with lots of supporting documentation. Thank you all for your help!

Steve