Using an active listing as a "comp"?

[Matt Anzaldo]

About me: I am a trainee with 2000+ hrs. of experience and I am going to get my license in CA soon. I really enjoy this forum b/c of the great feedback. I will do my best to describe the situation.

Subject: Inspection date 09/08/2006, SFR, 1000 sq. ft., 2/1 with a non-permitted mechanic shop and studio unit in rear and the neighborhood is mixed commerical/residential. Because of the location and size of the property the comparable properties in the subject's neighborhood were limited. I was able to find 4 similar proeprties, 3 sales within 6 months and 1 active listing.

Problem: I noticed one of my 4 comparable properties is currently an "active" listing on the local MLS. It sold on 06/14/2006 (about 3 months from inspection date) for $205,000. It is currently listed for sale on MLS for 07/14/2006 for $255,000. I am thinking I could mention the current listing in the sales comparsion section or addendum and leave the comparable as a "sale" not use it as a active listing.

Question: Can I use this comp as a comparable sale (comp#1 date 06/14/2006) in the sales grid section of the report? Can I just mention the active sale in the sales comparison section of the report? Do I have to use this comp as a active listing and nothing else?

Solution: Let me know if you have come across this before (I am sure you have) and what is the "protocol" a licensed appraiser would do in this situation.

My Choices: Use the comparble as a active and list the sale (date 06/14/2006) as a prior or Use the comparble as a sale and mention the active listing in the report. I am trying to use it as a sale b/c of the limited comps available in the subject's neighborhood.

Let me know what you think.

Thanks in advance for the help.

 

[CANative]

I've done it both ways. The way it's presented in the report has depended on how these two pieces of market data fit best in the overall case I'm making. Sometimes I grid them both, often side by side; sometimes I just grid either the sale or the listing referencing the listing or prior sale. It just depends on what I'm trying to show and what kind of drama I want to create.

I know that may sound "skippy'ish." Maybe someone else can explain it better.

 

[Otis Key]

I noticed one of my 4 comparable properties is currently an "active" listing on the local MLS. It sold on 06/14/2006 (about 3 months from inspection date) for $205,000. It is currently listed for sale on MLS for 07/14/2006 for $255,000. I am thinking I could mention the current listing in the sales comparsion section or addendum and leave the comparable as a "sale" not use it as a active listing.

Question: Can I use this comp as a comparable sale (comp#1 date 06/14/2006) in the sales grid section of the report? Can I just mention the active sale in the sales comparison section of the report? Do I have to use this comp as a active listing and nothing else?

Bold above my addition!

You're thinking you "could mention" the current listing????

I'm THINKING that you had better mention (report it, list the info, analyze and detail) it! If not, start sending out your resume for a different job. If you don't "mention" it in the report then it is going to appear that you are hiding something and then the report is going to get one of the "best/worst" reviews that you've ever seen.

To answer your question, did the property sell before?

 

[Matt Anzaldo]

To answer your question, did the property sell before?

The three year sale history of comp in question above.

Sold on 09/25/2005 for $95,000
Sold on 06/14/2006 for $205,000 (I want to use this sale in sales grid as comp#1)
Currenly an active listing on MLS on 07/14/2006 for $255,000 (I want to use this MLS listing as either comp#4 or mention it in report under sales comparison section or attendurm)

How would you handle this?

 

[Matt Anzaldo]

Boyd,

Thanks for the comment. So I could use the comp in question as a sale (comp#1) and use it again as a active listing (comp#5). That would allow me to have 3 sales and 2 actives = 5 comps. That would be great. Let me know if I understood the advice correctly.

-Matt

 

[Mike Kennedy]

Subject: Inspection date 09/08/2006,

Problem: I noticed one of my 4 comparable properties is currently an "active" listing on the local MLS. It sold on 06/14/2006 (about 3 months from inspection date) for $205,000. It is currently listed for sale on MLS for 07/14/2006 for $255,000. I am thinking I could mention the current listing in the sales comparsion section or addendum and leave the comparable as a "sale" not use it as a active listing.

Question: Can I use this comp as a comparable sale (comp#1 date 06/14/2006) in the sales grid section of the report? Can I just mention the active sale in the sales comparison section of the report? Do I have to use this comp as a active listing and nothing else?

My Choices: Use the comparble as a active and list the sale (date 06/14/2006) as a prior or Use the comparble as a sale and mention the active listing in the report. I am trying to use it as a sale b/c of the limited comps available in the subject's neighborhood.

Effective date of appraisal is after 6/14, and unless im bleary eyed on a sunday eve..........or unless you believe the current re-listing supports a time increase?? .............why do u feel the need to grid the listing........

with 3 good closed sales (assuming thats the case) AND after verification and citation of the Illegal Use of the Subject, if they fully support your opinion of value, utilizing the re-listing at a much higher list price may appear to skew the final value. unless NECESSARY, for some substantial reason, mentioning the re-listing in comments would appear to be sufficient without gridding it. IF however, best data available indicates it reflects the current upswing.......and is supported by at least one additional truly similar listing...........which MAY indicate Time Adjustment..........why muddy the water?>?:icon_idea:

 

[Joyce Potts]

Matt,

I think you're first instincts are right on target. Use the sale, but in your comments, you can mention that this comp is back on the market for $XX dollars for zzz days. Nothing wrong with that. I applaud the extra effort.

ALL data should be analyzed. For example, what if came back on the market for less than its last sale? What would that tell you? Would you use it then and would it speak to the 'principle of subsitution' and be a PARTIAL basis for a downward market condition adjustment?

_________________
Joyce J. Potts, SRA

 

[Doug Wegener]

Grid the sale and mention the listing. They can list them for any price they want.

 

[Matt Anzaldo]

Thank you all for the advice.

I ended up using the comp as a sale and mentioned the active in the report.

-Matt

 

[Walter Lea Thomas]

Analyze the sale and discuss the listing. Nothing wrong with using the listing also. I probably would but I would definitely want to find out why the difference in sale price versus listing price in so short a time also. If I could not get any more data, state as such but make the reader aware of what is going on. Could just be a mis-informed Real Estate Agent or there may be a reason why it sold "so cheap". It's waving a flag of some kind, I think.