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Incomplete purchase contract provided

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The conversation that goes on inside my head:

"Well I've inspected this house and the market. It's fairly typical of other houses in the immediate area but there isn't a whole lot of conformity around here and only a handful of sales each year. I did find half a dozen sales that are similarish and they sold for $700k to $780k. I made adjustments for differences in relevant characteristics and the market value indication now ranges from $725k to $760k. That's about as good as it gets. So I can tell you that the most probable price which the subject would have sold for is between $725 and $760. I really wish there was some piece of market data that could get that range tighter for your.

Oh, wait. What's this document? Ahhh, it's a sales contract. For the SUBJECT and it's dated just a couple of days before the effective date! Wow!!! The information just doesn't get better than this. I'd say the most probable sale price is what it says on this document because it IS the sale price."

It makes perfect sense and I can say this and even write this if I'm working for a private party, a lawyer, an assessor or any other client. I just can't say it to a lender or on www.appraisersforum.com.

:angry:
 
CANative said:
The conversation that goes on inside my head:

"Well I've inspected this house and the market. It's fairly typical of other houses in the immediate area but there isn't a whole lot of conformity around here and only a handful of sales each year. I did find half a dozen sales that are similarish and they sold for $700k to $780k. I made adjustments for differences in relevant characteristics and the market value indication now ranges from $725k to $760k. That's about as good as it gets. So I can tell you that the most probable price which the subject would have sold for is between $725 and $760. I really wish there was some piece of market data that could get that range tighter for your.

Oh, wait. What's this document? Ahhh, it's a sales contract. For the SUBJECT and it's dated just a couple of days before the effective date! Wow!!! The information just doesn't get better than this. I'd say the most probable sale price is what it says on this document because it IS the sale price."

It makes perfect sense and I can say this and even write this if I'm working for a private party, a lawyer, an assessor or any other client. I just can't say it to a lender or on www.appraisersforum.com.

:angry:
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You say it here and you are just a number hitter.

It has been some time since I appraised a property that I had a sales contract to consider, but I would think it constitutes pretty strong market evidence when it happens to fall within the adjusted range. Seems to make sense but that isn't always enough around here.
 
Enlighten us to understand the obscure joke! I called it lame because I did not get it, and I "get" most jokes...glad someone else enjoyed it!
 
It has been some time since I appraised a property that I had a sales contract to consider, but I would think it constitutes pretty strong market evidence when it happens to fall within the adjusted range. Seems to make sense but that isn't always enough around here.
__________________
I asked about a link or source because I have been challenged to provide one at times, as have other posters when they put forth a method or opinion that people question. If their method or opinion is supported by sources, someone always finds a link or advisory opinion or a quote from a text ....yet here we have appraisers who post continually that they swear by this method of opining to a SC price point value because it falls within a range of adjusted value, yet not a single one can produce a reference supporting this method.

That says something ...
 
One doesn't need a link to common sense.

Well, some might. #26
 
We all have common sense. Try defending your value with the phrase, "it made common sense". Good luck with that!

Nobody says to ignore a SC, or not consider it. But letting it dicate the value within a 60k spread is another matter. Guess it doesn't bother your private clients, because they are not lenders and not putting up any money. Why would a tax assessor need a purchase appraisal with a contract, and how many lawyers or borrowers order one? Even if they do order one, the value opinion is a bit different to them, because they are not lending on the home, are they?

Flip around your "common sense" excuse, and look at it from the lender/cleint's point of view. They already KNOW what the SC price is DOH. They don't need an appraiser to parrot it back to them! "Gee, the house is worth it because lookie here, a contract that says it is worth X! So it's worth X! " A fifth grader, or even a third grader could do that.

If that's basically it on a purchase appraisal, why would a lender hire us? It's not that hard to find comps and develop a broad value range. Sometimes a broad value range means custom homes and diverse market, other times it means the appraiser used poor judgement and picked the wrong comps or made faulty adjustments. Giving the benefit of the doubt, that the broad value range is legit, here we have "common sense" saying to opine exactly to SC price, becase it "fell" somehwere, doesn't matter where, anywhere will do, inside the broad range.

"Yo, the SC price says X, I might as well opine to X, cuz it , like, is within a value range! Where did it "fall", who cares where? Dude, here is it is, a sales contract for X! Okay!" Is that common sense, or nonsense?
 
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J Grant said:
It has been some time since I appraised a property that I had a sales contract to consider, but I would think it constitutes pretty strong market evidence when it happens to fall within the adjusted range. Seems to make sense but that isn't always enough around here.
__________________
I asked about a link or source because I have been challenged to provide one at times, as have other posters when they put forth a method or opinion that people question. If their method or opinion is supported by sources, someone always finds a link or advisory opinion or a quote from a text ....yet here we have appraisers who post continually that they swear by this method of opining to a SC price point value because it falls within a range of adjusted value, yet not a single one can produce a reference supporting this method.

That says something ...
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Not sure about your point regarding asking for a link, but why on earth would someone need a link to defend opining a value at the contract price when it falls within the adjusted range? That is frequently just common sense (as CAN mentioned). It is ridiculous to argue otherwise. Doesn't mean it is always the case, but it certainly can be (and would seem to make sense much of the time). I also don't understand what "method" you are asking about? Contract review? Not ignoring the obvious?

I've seen enough threads about this that I know you aren't going to change your opinion and that is fine. I just don't understand your logic and haven't any other time this has come up either.
 
Reconciling to the contract price is often the most logical outcome and is entirely compatible with the definition of market value.
 
CANative said:
Reconciling to the contract price is often the most logical outcome and is entirely compatible with the definition of market value.
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Where did you come up with this method?
 
It should be pretty funny to see how many interpret what you mean as hitting a bulls eye.
 
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