Placing weight on PENDING SALES

[Fernando]

The sales were all very similar, all in very close proximity and all with very few adjustments. It wasn't a simple average. It was a "weighted average". I have seen threads on this forum where some like it, some don't. It has it's purposes and is supportable.

My main question was about placing any weight on pending sales. If they were placed in a report, they were probably weighed in some fashion whether the appraisal admits it or not.

Freddie MAC and Fannie Mae both address listings and Freddie Mac goes so far as to state when listings should be weighted and how their weight should be addressed.

Seems like you have good sold comps. Why do you want to inject putting heavy weight on comments on pending when you don't know the true sales price until recorded?
Before when list prices were purposely listed below market, my adjusted value based on the list price skewed my appraised value. I gave LESS weight on list price.

 

[Yuanyin]

Seems like you have good sold comps. Why do you want to inject putting heavy weight on comments on pending when you don't know the true sales price until recorded?
Before when list prices were purposely listed below market, my adjusted value based on the list price skewed my appraised value. I gave LESS weight on list price.

I had the contract price from the agent. Probably shouldn’t have put any weight on them…or worded the reconciliation differently.

But I know what you mean. During 20/21 & the beginning of 22. LP was meaningless. You had to call the agent for the contract price every pending sale on the report. If I didn’t have it. Didn’t use it. The variance of LP to SP was easily 10%.

 

[ucbruin]

I had the contract price from the agent. Probably shouldn’t have put any weight on them…or worded the reconciliation differently.

But I know what you mean. During 20/21 & the beginning of 22. LP was meaningless. You had to call the agent for the contract price every pending sale on the report. If I didn’t have it. Didn’t use it. The variance of LP to SP was easily 10%.

Of the listing agents you were able to connect with....
What percentage actually told you the contract price of their pending sale....

 

[Yuanyin]

90% easily, almost all of them.

 

[ucbruin]

90% easily, almost all of them.

Great track record....
You must be a smooth talker....

 

[Fernando]

90% easily, almost all of them.

As an agent I would never disclose my exact sales price. Thus, I try not to put the agents in such a situation unless I really need to know the sales price (Good pending sale) because I would indicate the hearsay price in my appraisal report.
Fortunately, when I needed their help. the listing agents disclosed the ratified offer price. Very nice and thank you.

 

[Yuanyin]

Great track record....
You must be a smooth talker....

 

[Yuanyin]

I never pressure anyone. I just say I'm doing an appraisal at x address and I see your property went under contract in 2 days. I think I want to use it as a comp. Is MLS list price reflective of the contract price? Almost all the time they'll say are under contract for x amount. I thank them and wish them the best of luck with the sale. If they don't want to tell me I understand.

 

[Fernando]

I never pressure anyone. I just say I'm doing an appraisal at x address and I see your property went under contract in 2 days. I think I want to use it as a comp. Is MLS list price reflective of the contract price? Almost all the time they'll say are under contract for x amount. I thank them and wish them the best of luck with the sale. If they don't want to tell me I understand.

You got some really nice agents in Colorado. Or not so smart ones. I could be another agent wanting to know the ratified offer price.

 

[Tiffany Gibbons]

A standard statement I sometimes use may go something like, "Most weight was placed on x, y and z due to recent sales date, physical similarities, location etc, LESS weight was placed on comparables 4 and 5 since they are under contract without a settled sales price.

But I don't say no weight. What would be the point of using them at all then?

To me there is not much point. You don't know if it will ever actually close or the contract terms. You can use them as support for the market value, but they should not be weighted in the market value at all. Sometimes worth mentioning if you have a feature you could not find a sale with but otherwise, why?