underwriter's request for sp/lp ratio

[London]

We did an appraisal for an FHA loan. We had a condition from the underwriter stating: "provide # of listings for last 2 quarters; average market time for last 2 quarters and sale/list price ratio (for last 2 quarters in numbers, no graphs).

-So we did what they requested. provided them with recent, and proceeding quarter. The MLS has a statistics page, which calculates this ratio from original list price, as it should (not final list price). We selected only comparable properties for this ratio. This was about a week ago, and didn't hear anything until today.

We got a call saying that because the sales to list price ratio is under 90% the underwriter will not make the loan. I told them that is ridiculous, never heard such a thing. I also told them that is what it is, and if I was to include properties that are not comparable, it would drop more. So now we have fingers poking into our eyeballs, and blaming us for failure to obtain a loan. Then I got another call that it should be base of final list price, and not original list price, and the number would be at 90%.
I believe the sale to list price ratio should be calculated from the Original list price, and not the final list price. Am I wrong? This whole situation is ridiculous.m2:

 

[Michael Wood]

In my office, we use the final list price. When the property sells, it's not listed for the original price, it's listed for the final listing price.

I hope that makes sense. It's been one of "those" days.

 

[Mountain Man]

Because our MLS has 2 stats features, sales to original list and sales to list, I'd think it would be the list price at the time of sale. But in times such as these, I'd think the prudent lender would be interested in sales to original list... bad appraiser, giving too much data!

 

[Judy Whitehead (Florida)]

We use the final list price, as well. Homes that have been listed for over 1 year are being substantially reduced in list price if the owners actually want to sell it.

 

[Mike Kennedy]

Ditto Final List Price after citing OLP date, downward adjustments to List, a conclusion based on market data for the most similar properties as to whether the OLP appeared to reflect unsupported higher motivations of interested parties which had a negative impact on exposure time and the opinion of market value.

 

[hglenbetts]

As a Broker, I would argue that the original list price (in MANY cases) reflects the Realtor's inability to convey the truth about the market to the seller. Many agents, even in the office where I practice, will take the listing at any price with the intention of getting it lowered to a true marketing range down the road a bit.

The only ratio I would be concerned about is the sale price (less concessions) vs the final asking price, which reflects the true marketing range.

By the way, I just bought a new Mustang for half price. The dealer was originally asking $75,000. (get the point?)

 

[Jodie Argubright]

I agree, final list price. Anybody can list a house for a million, does not mean it is worth it...

 

[William K]

I agree it is final list price ( relates to exposure time not market time).

Bigger oddity is these are not FHA guidelines? If this was an FHA loan then the lender is the one with guidelines in excess of FHA guidelines.

As an FYI: They can always go to another FHA lender that doesn't require things above the FHA minimum guidelines and the appraisal along with some loan documents are transfered from old lender to new lender.

 

[London]

Thank you all for the replies!

 

[Metamorphic]

Why in the world would a lender make a lending decision based on the average skill with with the agents working in the market list properties. They might as well ask to measure how loud the garbage collectors bang the cans together as a metric for approval.