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using comp twice

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shawn hickey

Freshman Member
Joined
Jan 17, 2003
I have a comp that was sold nine months ago and is now a contingent sale. My question is whether I can use this comp twice in my market analysis grid-once as a sale and again as a contingent 4th comp. it's a manufactored home in a market with almost no manufactred comps( I have one other decent one and then plenty of non-manufactored comps that amply support value). This one is the perfect comp so it would be great if I could use it this way. will this fly :?:
 

Craig Sewell

Freshman Member
Joined
Feb 6, 2002
Use it twice. If there have been no major repairs or remodeling since it's purchase 9 months ago it will also give an indication of what the market is doing, appreciating - depreciating - remaining stable. Keep in mind you may not be able to verify the contract price of the contingent sale until it closes. Also, be careful giving the under contract comp too much weight in the sales comparison approach until it's sale price can be verified.
 

Mike Garrett RAA

Elite Member
Gold Supporting Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
You could but do you really want to? Most of the time these are not good sales...usually a divorce case or corporate relocation and neither usually reflect the true market.
 

Rob Bodkin

Junior Member
Joined
Nov 9, 2002
Professional Status
Certified Residential Appraiser
State
Washington
If, and it is a really huge if, you can confirm that both transactions were fair market and arms length, then it would appear to be an excellent indication of the market over the past year. We would use it as you describe.


Rob Bodkin
Freestone Partners
 

George W Dodd

Senior Member
Joined
Jul 9, 2002
Professional Status
Certified Residential Appraiser
State
Virginia
I agree with Rob, if it's a good transaction both times then use it both times. In any event you might want to disclose the details of both transactions in your report.
 

Tim Hicks (Texas)

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Texas
Until you see the actual terms of sale, how can you judge whether it is a reliable comp. Plus, if the sale has closed twice in the last year you have to disclose it in the report and on the form. Therefore, you really don't need to list it twice, but you can reference the old sale in your comments. You could do the same thing in your comments if it has not closed yet. Just remember, what if you utilize it as a pending sale, but then it actually sells for much less than list price (it happens) at closing or is owner financed or some other special financing. Then you could be accused of presenting a misleading report because you did not know the actual closing information. Don't build your own traps. :(
 

Jo Ann Meyer Stratton

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Arizona
I agree with Tim. There have been times when a comparable sells less thatn 12 months ago and is now back on the market. If I use that specific property as a comparable, I used the date it closed and then in my addendum about the comparable, I discuss the market activity that occurred before the close of escrow and discuss the current market activity. I would never use the current active/pending info on the grid itself, unless the previous sale was as a "fix up" disaster and is now totally renovated. I do use active/pendings/withdrawns/cancelled listings occasionally as Comparables #4 or higher. But many things could occur before those properties do close escrow (if they sell). Sometimes they do serve for illustrative purposes at least, rather than an indication of value. Yes, there is another property in the county that has 4,000 square feet that is being marketed-when all the closed sales are 2,000 square feet for example. But the last arms length transaction that has been exposed to the market is what should be reported in the sales grid.
 

Restrain

Elite Member
Joined
Jan 22, 2002
Professional Status
Certified General Appraiser
State
Florida
I've used the sale of a home twice, sometimes for trend forecasting, sometimes to show the differential between a home that needed work and one that has been updated for resale. In any event, it makes a good paired sales analysis.

Roger
 
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