Sales Price to List Price Ratio

[John Hassler]

But you have your closed sales to hang your hat on. Don't they tell the story in its entirety?

If this is your opinion, then whether to use a SP:LP or not is moot as there is no need for you to include listings in the first place.

 

[Mr Rex]

I guess my sarcasm wasn't readily apparent without a smiley.:new_smile-l:

 

[Mike Kennedy]

If this is your opinion, then whether to use a SP:LP or not is moot as there is no need for you to include listings in the first place.

:icon_idea:Scope of Work. Eiither add 'em and adjust 'em - or decline the order.

p.s. retro closed sale search - 1-12 months. 12 closed sales of truly COMPARABLE properties result.

IMO, unless all 12 (or at least a majority) sold at 100% of List, ....NOT adjusting truly comparable actives which would absolutely "compete with the subject" is misleading. Adjustments to Actives utilized should be extracted from the Closed Sale Comparables utilized in the report - not the median. Comparable= the most similar, proximate and recent closed, contracted, and/or actively listed properties which would directly compete with the subject based on the Principle of Substitution.

 

[John Hassler]

I guess my sarcasm wasn't readily apparent without a smiley.:new_smile-l:

My mistake then. Your prior avatar offered more facial cues.:new_smile-l:

 

[John Hassler]

:icon_idea:Scope of Work. Eiither add 'em and adjust 'em - or decline the order.

I have yet to receive an order which required a SP:LP adjustment in the SOW for listings. However, if I do I will treat it like a request to provide at least one pink house in my SCA. That is, I will include it in my report but exclude it from my analysis.

 

[Mike Garrett RAA]

If I am going to include listing on a grid then I believe it is important to adjust them. If the data shows sales typically are, say, 3% below the listing price then a 3% adjustment is supportable and warranted. Not to do so indicates a severe lack of understanding of the appraisal process.

 

[Mike Kennedy]

I have yet to receive an order which required a SP:LP adjustment in the SOW for listings. However, if I do I will treat it like a request to provide at least one pink house in my SCA. That is, I will include it in my report but exclude it from my analysis.[/quote]

John - a few questions, please.

1. Does your report also not address market conditions including addressing typical L/S discounting as market-indicated?

2. Do your mortgage appraisal reports ever require the 1004MC in SOW? If so, do the reports provide additional commentary analysis?

3. Are your mortgage reports done on Fannie/Freddie forms? Do they fall under GSE guideline SOW requirements? >>

2009 Fannie Selling Guide- Appraisal Requirements
"Requirement
Influences that may affect value based on market evidence—such as closed sales, contract sales, and offerings or listings of the most comparable properties for sale in the market area; market studies; etc.—must be researched, analyzed, and considered in the appraisal report."​

4. Do any of your mortgage reports fall under FHA/HUD guideline requirements in SOW?

Per Mortgagee Letter 2009-09, as of April 1, 2009 appraisals for all FHA insured mortgages must include the Market Conditions Addendum.

In addition to providing three recent comparables (properties similar to home being appraised that have recently closed in the area); appraisers are required to:

• At least two of the three recent sales (comparables/comps) must be within the last 90 days of the effective date of the appraisal.
• Include a minimum of two active listings or pending sales. The appraiser must insure the active listings and pending sales "have reasonable market exposure to avoid the use of over priced properties as comparables."
• Include the original list price, any revised prices and total days on the market.
• Adjust active listings to reflect list to sale price ratios for the market.
• Adjust pending sales to reflect the contract purchase price whenever possible or adjust pending sales to reflect list to sales price ratios.

5. When you include "it" in your report - do you not analyze it as illustration of a competitive, available, property which would compete with the subject and ergo the OTHER closed or actively listed properties?

6. Does your report "inclusion" include any discussion of typical buyers' reaction to that Active Listing you mention as having at least some relevance as a potential value indicator i.e. a competing property active on the market which supports value market conditions, DOM, typical LP/SP etc.?

7. How is that possible value indicator addressed in your report? It must be a possible value indicator with relevance to the assignment or it would not be noted in commentary - no ?

8. If it is worthy of note in report comments as being relevant - whether gridded or not, and whether GSE or FHA Scopes of Work are applicable - does it not require a more than cursory mention? If it's not relevant, then why would it be included in the report at all?

Thanks in advance.

 

[Mike Kennedy]

If I am going to include listing on a grid then I believe it is important to adjust them. If the data shows sales typically are, say, 3% below the listing price then a 3% adjustment is supportable and warranted. Not to do so indicates a severe lack of understanding of the appraisal process.

Ditto.....

 

[David Dietz]

Based on all this logic of not wanting to predict an event I guess those who are apposed to this adjustment do not give an opinion of values since this is a prediction of a what could have been, I do not see the difference.

Besides you are not predicting what the comparable would sell for by adjusting L/S since you adjust the comps to the subject which in effect would be predicting what the subject would sell for which is what market value is reflecting in the first place.

 

[fifteen]

The want a scatter shot to accompany your direct hit in the analysis. For what purpose? To prove you're skilled and not lying? I find that 99% of properties sell within 90 days of their final list price and most within 45 days. Adding listings proves nothing as whatever point anyone is making in the opinion anyone can find listings to back it up. I think that process is misleading and I agree with TJ. How many times do you go to a HO house and ask if there were any sales they know of and they say "zzz down the street is listed at $250k so my house must be worth more than that. Readers of the report do place a high regard on listings as indicative of value and in that respect, it is misleading. Could the purpose of this requirement be to feed their AVM's? It's an exercise in futility as it does nothing to change the value concluded. I include pendings all the time (but give them no weight, added just as a reference for the reader) but avoid actives like the plague. Too many times you see properties sitting for over a year and dropping the list 40%+. Their inclusion is an attempt at micro-manageing. To me, it's another report we're not getting paid for, ie.. what is the subject's listing value? Just let us appraise to a range and be done with all this worthless extraneous analysis.