Appraised Value Below Contract Price

[Pittsburgh Pete]

There is NO requirement to comment or explain a difference between the opinion of value and some other benchmark such as a purchase contract. So you're argument that it is somehow a requirement goes right out the window.

You find me just ONE state board sanction record that specifically mentions not explaining the difference between contract price versus the opinion of value and I'll change my position.

For one thing if this was a hard requirement it would be viewed as compromising appraiser independence.

A knowledge of the English language is a must for appraisers--it is clear that some lack that knowledge.

Definition of "analysis": "a separating or breaking up of any whole into its parts. esp. with an examination of these parts to find out their nature, proportion, function, interrelationship,etc. "

Seems to me that one of these parts is the contract price!

Needless to say, I agree with Calvin.

 

[mark hurlock]

Think about it for a moment...if instead of being deal faciliators, appraisers reclaimed their role as market experts and opined indpendent values, business opportunities would double. Realtors would recomend that parties get an appraisal done prior to negotiating, and sellers would hire an appraiser for a list price.

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J,

perhaps all purchase contracts should be written to allow the last page containing only the price to be removed before submitting to the appraiser. This way all of the “required” analysis can be performed without being subjected to the undue influence of knowing the sale price.

 

[Calvin the Airedale]

It is obvious why you post with an alias.

And it didn't take much of an analysis to come to that conclusion.

You made a statement as though fact and failed to document your claim. I simply gave you the benefit of the doubt. If you owe anything, it is to your own credibility.

The word "analyze" covers a lot of territory. Obviously it means something different to you than to me. What it means to any of us is likely the function of several things: logic & reason; written regulation; assignment conditions; client requests; communication and experience with regulators; communication and experience with GSEs; experience and discussion with peers, clients, and appraisal users over the course of our careers; and lastly, the dictionary definition of the word and its application in common usage.

If I have been brusque in my replies, I apologize.

As for who I am, anyone wishing to know can figure it out. It took Ken B. all of 3 minutes. If he becomes the standard by which I analyze your cleverness, it may take you a little longer.

 

[Pittsburgh Pete]

J,

perhaps all purchase contracts should be written to allow the last page containing only the price to be removed before submitting to the appraiser. This way all of the “required” analysis can be performed without being subjected to the undue influence of knowing the sale price.

If that is considered "undue influence" you're in the wrong line of work!

 

[J Grant]

I figured out who Calvin is, the appraisal god! Didn't take long!

 

[mark hurlock]

A knowledge of the English language is a must for appraisers--it is clear that some lack that knowledge.

Definition of "analysis": "a separating or breaking up of any whole into its parts. esp. with an examination of these parts to find out their nature, proportion, function, interrelationship,etc. "

Seems to me that one of these parts is the contract price!

Needless to say, I agree with Calvin.

And you expect the rest of us who firmly comprehend the English language to believe FNMA just left that part out of the analysis comments in their selling guide because why?

 

[residentialguy]

..how is it that a buyer and seller always manage, a few weeks or more prior, to arrive at the exact same amount in a SC price that later the appraiser will opine as their point value?

Yes....those buyers and sellers are called the market. That applies to your subject and all your comps, including the cash deals that you use that didn't need an appraisal! Oh my...how the hell could they be right???

 

[J Grant]

If that is considered "undue influence" you're in the wrong line of work!

How is the SC price not be undue influence, since 80% + of purchase appraisals ending up matching it? (that is an estimate, the real figure may vary)

The problem is this, it's not the SC price itself that's the undue influence, appriaisers can work with that. It's the expectation of what is supposed to happen once an apprasier learns the SC price that is the problem.

Just look at one part of the problem. Since the appraiser knows the SC price, any amount they come in below on a MVO is seen as "killing the deal." If they never knew the amount of the SC price, then how could they have "killed the deal"?

Plus some clients, among them high volume clients, stop assigning work to those appraisers who don't always meet SC price. If none of the appraisers knew the SC price, then none of them could routinely "meet" it, thus, it would level the playing field. and (gasp) mean appraisers have to opine independent MVO , each time out.

 

[mark hurlock]

If that is considered "undue influence" you're in the wrong line of work!

So you would have everyone believe that appraised value hits the contract price so often because why?

I really do want to hear this one.

 

[residentialguy]

Mark doesn't use the sale comparison approach...apparently most are off and the prices don't represent market value.