Appraised Value Below Contract Price

[Pittsburgh Pete]

P.S. nice regurgitation of the opening line of USPAP. Goes to show that you have no clue as to the purpose of USPAP beyond that simplistic one liner.

 

[JSmith43]

So, is it good appraisal practice? It could be, if one prepares a neutral statement that satisfies the request

A statement, a canned statement? An appraiser should think like Dick Tracy and show them the clues you found & share with them the most likely explanation of what to make of it. Example: The transaction included multiple counter offers & amendments, with the changes made, indicative of a negotiated competitive transaction. The MV estimate and contract price roughly correlate (or not). Point out areas of concern such as an FHA PA without lead based paint disclosure or an "escape clause" with the purchase price filled in, etc.
You could actually apply a bit of that Realtor background, assuming you have kept up to date with lender requirements and contract element requirements for various scenarios.

 

[J Grant]

Dear Ms. Grant,

You are a true form filler. If the market value opinion was stated on page 1 of the subject heading, would you fill that in first as well ahead of all the other sections?

What a moronic statement. The MVO needs to be developed to be stated. If the section was on Page 1, then the appraiser would have to develope the MVO on page one, or develop it elsewhere, and then put a comment on page one that thought the MVO is stated on page one, it was developed on page two (the SCA page)

It is not a matter of being a "form filler". All appraisers, res or commercial, when doing lender appraisals for fed transactions work with forms. The forms contain narrative as well as sections where the appraiser puts information. If you want to call it form fillling, do so, but an MAI fills in the same form then as a traineed.

That aside, the appraisal forms were developed with sections in certain order to help organize certain aspects of report development, such as in the SCA grid, when the financing and concession lines are first on the grid. The form is actually very well designed and logical, going from wider analysis (the neighborhood, market area trends), to the more specific.

The contract analysis asked in the CONTRACT SECTION (doh), for a reason, because that's where it belongs. The form designers, wanted the SC section up front for a reason, they wanted to address it BEFORE the appraiser develops the MV opinion. I would suppose the forms are vetted by the TAV, MAI's, GSE's, etc, and designed for a reason, not just thrown together in random order.

So despite your disparaging comment about form filling, the order of sections exist for well considered reasons.

You keep fighing to make people believe it is some kind of requirement, to do ANOTHER contract analysis, AFTER the MVO is developed, when in fact, the ASB and the way the form is organized and language in the certs, specifically are against that.

But hey, if as an individual appraiser you want to do it, go ahead, and if but don't try to claim it is "required" as part of contract analysis, or that a contract anaylsis has to include a discussion of SC price in the context of MVO.

Though some clients are asking for appraisers to comment on a variance between SC price and MVO, they are not asking the appraiser to reference the variance as inclusive of the SC analysis itself.

Even the clients recognize that asking for an explanation of why SC price and MVO differ appropriately belongs toward end of report, after the MVO is opined.
.

 

[J Grant]

So Pittsurgh, provide us with your sample analysis of a SC then. (Calvin provided a sample of his in a prior post, and it was very similar to what I provide)

Let's see your legal scholar level of contract analysis!

 

[Pittsburgh Pete]

What a moronic statement. The MVO needs to be developed to be stated. If the section was on Page 1, then the appraiser would have to develope the MVO on page one, or develop it elsewhere, and then put a comment on page one that thought the MVO is stated on page one, it was developed on page two (the SCA page)

It is not a matter of being a "form filler". All appraisers, res or commercial, when doing lender appraisals for fed transactions work with forms. The forms contain narrative as well as sections where the appraiser puts information. If you want to call it form fillling, do so, but an MAI fills in the same form then as a traineed.

That aside, the appraisal forms were developed with sections in certain order to help organize certain aspects of report development, such as in the SCA grid, when the financing and concession lines are first on the grid. The form is actually very well designed and logical, going from wider analysis (the neighborhood, market area trends), to the more specific.

The contract analysis asked in the CONTRACT SECTION (doh), for a reason, because that's where it belongs. The form designers, wanted the SC section up front for a reason, they wanted to address it BEFORE the appraiser develops the MV opinion. I would suppose the forms are vetted by the TAV, MAI's, GSE's, etc, and designed for a reason, not just thrown together in random order. :Eyecrazy:

So do you think the same of the H&BU? Do you address it before your valuation process or is it determined after the valuation process has been properly addressed? You apparently are a form filler with all the negative connotations that go with that label.

So despite your disparaging comment about form filling, the order of sections exist for well considered reasons.

You keep fighing to make people believe it is some kind of requirement, to do ANOTHER contract analysis, AFTER the MVO is developed, when in fact, the ASB and the way the form is organized and language in the certs, specifically are against that.

But hey, if as an individual appraiser you want to do it, go ahead, and if but don't try to claim it is "required" as part of contract analysis, or that a contract anaylsis has to include a discussion of SC price in the context of MVO.

Though some clients are asking for appraisers to comment on a variance between SC price and MVO, they are not asking the appraiser to reference the variance as inclusive of the SC analysis itself.

Even the clients recognize that asking for an explanation of why SC price and MVO differ appropriately belongs toward end of report, after the MVO is opined.
.

So by just filling in your lines and checking your boxes are you creating a USPAP compliant document? If not, what on God's earth was TAF and the others thinking? Get a clue!

 

[JSmith43]

I would suppose the forms are vetted by the TAV, MAI's, GSE's, etc, and designed for a reason, not just thrown together in random order.

I always run my appraisals past TAV vetting standards

Actually, JGrant, the appraisal forms are most likely run past bean counters, real estate attorneys, quants, etc, with the eye on future data collection and analysis and to shunt off future political and economic liability.

Adherence to USPAP may not have made the list. Following the form certainly doesn't get you there. The forms are designed for the purposes only known to the mother ship and its rotating group of politically connected pilots.

 

[J Grant]

A statement, a canned statement?

The statement I referred to is NOT SC analysis, the statement I referred to is the explanation of why SC price and MVO differ.

An appraiser should think like Dick Tracy and show them the clues you found & share with them the most likely explanation of what to make of it. Example: The transaction included multiple counter offers & amendments, with the changes made, indicative of a negotiated competitive transaction. The MV estimate and contract price roughly correlate (or not). Point out areas of concern such as an FHA PA without lead based paint disclosure or an "escape clause" with the purchase price filled in, etc.
You could actually apply a bit of that Realtor background, assuming you have kept up to date with lender requirements and contract element requirements for various scenarios.

Your contract sample analysis is impressive, the most impressive I've seen yet

The part aobut MV estimate (opinion) and SC price roughly correlating though, would not be in the first section SC analysis in the first section, since the MVO was not part of the existing signed contract. The MVO is typically not developed till weeks or months later.

If an appraiser chooses to weave the SC price and MVO correlation into a contract anaylsis, it would have to be a SECOND anaylsis, since the first analysis specifically asks the appraiser to analyze the existing contract , as is.

It might one day evolve to be expected to provide a second SC analysis with a level of detail of why or why not a MVO and SC are the same, (or differ), but that might involve changes to the certs and a USPAP addition to address it.

At present,, cert 18 on the signature page states the appraiser has not presented an analysis that supports a predetermined value or outcome, such as a pending mortgage loan approval, (of which SC price is part)/ What is your opinion on that, and how it plays into an appraiser doing that very thing, presenting an analysis of SC price?

 

[JSmith43]

Crap. You beat me again, you kool aid creature.


OK, you will not have thought of this:

Under the JG theory would not the letter of transmittal belong after the grid in a form report?

 

[Pittsburgh Pete]

Your contract sample analysis is impressive, the most impressive I've seen yet

The part aobut MV estimate (opinion) and SC price roughly correlating though, would not be in the first section SC analysis in the first section, since the MVO was not part of the existing signed contract. The MVO is typically not developed till weeks or months later.

If an appraiser chooses to weave the SC price and MVO correlation into a contract anaylsis, it would have to be a SECOND anaylsis, since the first analysis specifically asks the appraiser to analyze the existing contract , as is.

It might one day evolve to be expected to provide a second SC analysis with a level of detail of why or why not a MVO and SC are the same, (or differ), but that might involve changes to the certs and a USPAP addition to address it.

At present,, cert 18 on the signature page states the appraiser has not presented an analysis that supports a predetermined value or outcome, such as a pending mortgage loan approval, (of which SC price is part)/ What is your opinion on that, and how it plays into an appraiser doing that very thing, presenting an analysis of SC price?

What on God's green earth does Cert 18 have anything to do with this? You appraise the property with no predetermined value--the SC is not a predetermined value in any stretch of the imagination. It is merely a meeting of the minds between the seller and the buyer.

AMAZING!!!!!!!!!!

 

[J Grant]

So by just filling in your lines and checking your boxes are you creating a USPAP compliant document? If not, what on God's earth was TAF and the others thinking? Get a clue!

DOH, who said that? USPAP compliance and filling in the form are two sep things, and an MAI has to fill in the same form as you or I, so why keep dragging in the phrase "form filling?"

If you don't want to fill out a form, don't do fed related lender appraisals.

USPAP compliance is another issue, and again , NOWHERE in USPAP does it state that the MVO and SC price need to be analyzed in relation to each other, or corrleated, or reconciled, and there are no advisory opinions that doing so is part of the contract analysis.