[J Grant]

Riick, you actually are in agreement with me!

When I wrote there are always closes higher sales, I should have quantified it...as every time I supported a high price for area, or first sale of its type to sell in a year for X$, I was always able to find a higher priced sale or two, plus listing support, in a competing area, or back in time.

What you wrote is correct, and describes the other side of the problem...if no closed sales of equal or higher price can be found in any reasonable distance or back in time frame, the subject may be an over improvement, or have marketability problems. That would not always be the case, but many times, it would be, as your example showed.

[J Grant]

Originally Posted by Riick

Mr./Ms. Grant - Nonsense, there are NOT always closed sales.

One of the last assignments I got as a subcontractor, 1,000,000 years ago, was Sale of a 7,800 sq.ft. townhouse in downtown Philadelphia, for $1,350,000.
I called my "boss" and told him "There are no comps!"
((Highest sale in this heavily populated urban area -at that time- was $965,000))
Bossman said: "There are always Comps"
I said "Good, then you find them"

Somebody had to break the $1million barrier, and as a newbie, it wasn't going to be me.
BTW... turned out that property never closed, (Well, not that decade) no one could support the sale price,
and then, a month later, the Boom blew up (c.1989) and market values dropped thru the floor.

A = A and Reality is Reality


/

Right, and in this reality, the market spoke, the subjet never sold over a million.

Appraisers were giving the opposite example, re, saying they would support the highest sale price with no comps, but by providing narrative explanation.

So these appraisers would have used all lower comp sales, and supported this 1.35mil sale price with narrative...shows how weak that argument can be, imo.

[J Grant]

Originally Posted by residentialguy

Going out further and finding a higher priced sale doesn't make it a better sale, in fact it will probably be worse. Nor does having sales below the OMV mean that they are poor comps. The adjusted price is what supports value.

Really? Read the Rick's post #40, about the 1.350 mil sale price that never closed due to lack of support, since no other similar unit had closed above a million dollars.
Shortly afterward, the market crashed.

By your thinking, (the adjusted prices is what supports the value), then you would have used the avail sales that were no higher than 965k, adjusted them up to 1.35million, and then claim that the adjusted value supports the sales price!

[J Grant]

Originally Posted by residentialguy

Going out further and finding a higher priced sale doesn't make it a better sale, in fact it will probably be worse. Nor does having sales below the OMV mean that they are poor comps. The adjusted price is what supports value.

I didn't say it would be a better sale, I said, if the OP can find a house in another area which brackets at least some of the subject features, view, for example, and also sold higher $, it would show support for a higher price (as would a dated sale of similar semi detached with a view)

[J Grant]

Bottom line, it is the lender's money, not ours. Since it is their money, they can make whatever guidelines they like (just as we can thumb our nose at their guidelines, if we choose).

Whether or not we follow their guidelines, we have to provide a credible report. One of the best ways to provide a credible support for value is with hard evidence, re, real closed sales in the market. In this climate, lenders prefer hard evidence , and who can blame them? What is more persuasive, actual data from the market, or a few paragraphs of narrative ?

If you were lending 200k of your money with a house as collateral, what would you rather see:

Real evidence of closed sales of similar homes that sold at 200k or above?

Or a grid of sales under 185k with upward adjustments, followed by an explanation of why the appraiser thinks the house is worth 200k ?

Lenders relied on that in the boom, and got burned, so they are more cautious now.

[residentialguy]

Originally Posted by J Grant

Really? Read the Rick's post #40, about the 1.350 mil sale price that never closed due to lack of support, since no other similar unit had closed above a million dollars.

Oh please, you don't know why it didn't sell. Stop pretending you do. And the market blowing up had nothing to do with that sale.

[J Grant]

no one could support the sale price

This is copied form the OP's post on the topic, HE said no one could support sales price and therefore it did not close.

[residentialguy]

Originally Posted by J Grant

no one could support the sale price

This is copied form the OP's post on the topic, HE said no one could support sales price and therefore it did not close.

That doesn't mean the market value wasn't $1,350,000. That could be the case....or it could be that no one was competant enough to appraise it.

[J Grant]

Originally Posted by residentialguy

That doesn't mean the market value wasn't $1,350,000. That could be the case....or it could be that no one was competant enough to appraise it.

Yeah, too bad you weren't around! You could have adjusted the 975k similar sales prices UP to the contract price of 1.35 million and it would have closed!

The fact that the housing market collapsed right afterward , you see no irony in that?

[Renee Healion]

Why can't the appraiser appraise and the underwriter underwrite? They can make changes that suit their perception of risk after the appraisal is reported to them. Not in the making of it.