Real Estate Law/Ethics

[Bob Ipock]

That is poor methodology that assumes the current listing is the only one leading to the current price. There may be five.

The 2.8% number is for the LAST MLS LISTING. The actual % may be 5, 10, 15% or more from the original list price.

Use the "Archive" search and you can see if there have been other listings of the property prior to the current one.

Some people will change Realtors several times and each time the DOM clock starts over.

This failure of the MLS to show TOTAL days on market (adding together any other listings of the same property) is another indication of the dishonesty that is embraced by real estate practitioners.

 

[Queen City Gurl]

If you do your due diligence, and research the comps thoroughly... you would find out about numerous listings of the comp. I do take the steps to do that, and would therefore address that situation, if it were the case. I do archive searches all the time. I am very familiar with having to put the full picture together by doing some extra digging !
That being said.... the methodology I referred to in my post, in my opinion, is still a very good methodology to employ , when utilizing active and pending comps. It still attempts to address the differrence between what the property was listed for, and what it would most likely sell for, given the actual sales price is not available to us. By not making that adj., you are not accurately measuring market activity. As there is often a difference between the two prices. If you are utilizing actives and pendings, I think it is a warranted adj.

But, that's my opinion. I can't say I agree with yours that it is a poor methodology. In fact, obviously, I think just the opposite !!

 

[Doug Smith SRA]

Enough Already!

Lenders first asked for listings, then wanted listings gridded, then wanted the grid to reflect typical list sell ratios. Now they want pendings and the contract price? I think it is time to ask our selves what is the "normal course of business." I am lucky to get someone on the phone to confirm the sale and I hold my breath when it comes to getting concession information. Some may not have noticed but real estate agents are not easy to reach these days and many are not in a very good mood. Last week I talked to a broker and tried to get closing dates and information on some builder sales. I was told "to go knock on doors" if I need that info.

With all these lender requirements for forward listings and pending sales, appraisals are beginning to look more and more like forecasts and ERC reports.

I don't care what the ethics are; I don't think it is realistic to expect that deriving the contract price is within the "normal course of business." I also don't think in these times the information can be accepted as reliable.

I think lenders are losing sight of the definition of market value. If the lender wants a forecast appraisal, let them provide a new definition.

Here is where we are going:

This quote is from the latest LandSafe "Important Notice."

By comparing the total number of closed sales or the last 12 months to number of current listings in the same market area, the potential supply can be determined. If the supply of properties for sale reflects an over-supply for the subject market, the appraiser should provide comments that explain how the over-supply impacts market value.

The most important word is "current" listings. No mention is made of comparing the number of past listings with what actually sold. I know it says "explain" but isn't the implication that appraisers are being asked to consider what is going to happen?

Enough already!