USPAP and pending contracts.  What does that mean?  It means its is perfectly OK to use the pending purchase and sale contract on your subject as a comparable!  Underwriters will swear that is a violation of USPAP!  Reviewers will need to buy red pens by the gross to mark-up reports if that happens!  Heads will explode!  GSEs will start to care about appraisers and what they think of the 1004 form! Civilizations will crumble!  The Republican party will  finally get its act together and elect a candidate to the White House!  All of these are stinky hogwash since they will never happen, even if appraisers start to use the purchase and sale agreement as a comp.  (OK, if appraisers start using the purchase and sale agreement as a comp, civilizations may crumble.)

In fact, when it comes to USPAP and pending contracts, it may be internally inconsistent not to use contracts as comps.  USPAP says nothing about this phenomenon. Actually, the Fannie Mae Selling Guide encourages it.   A contract is nothing more than another data point to analyze. So, why not analyze it as if it were a comparable sale?  It is a component of neighborhood trends.  So why not analyze it as part of neighborhood analysis?

Since USPAP and pending contracts is such an important concept, it is important to understand.  That understanding starts here!  Thanks for listening!